Latest Mexico Trade Deal a Dud for Southeast Specialty Growers

Latest Mexico Trade Deal a Dud for Southeast Specialty Growers

Donald Trump at campaign rally

Does the latest trade agreement between the U.S. and Mexico signify the death of NAFTA as we know it?

President Trump can tend toward hyperbole in his speech and tweets, but when he has called NAFTA the “worst trade deal in history,” Florida specialty crop growers would certainly agree. So, when the president announced a renegotiation of NAFTA in the early days of his presidency, there was a hope that a new deal would bring some relief to growers who have felt the devastating impact of Mexican imports.

After months of intense negotiations, on the morning of August 27, Trump tweeted: “A big deal looking good with Mexico!” Later that day, he announced that the U.S. and Mexico had come to an agreement to modify key provisions of NAFTA.

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So, does this mark the death of NAFTA? The president seemed to indicate it did. In an Oval Office announcement of the preliminary agreement, Trump said: “They used to call it NAFTA. We are going to call it the United States – Mexico Trade Agreement.”

And, what about Canada? In making the announcement, the administration appeared to be putting pressure on Canada to speed up negotiations and give ground on key provisions. The U.S. Trade Representative Robert Lighthizer said it would be more ideal to have Canada involved, but if not, they intend to sign a bilateral deal with Mexico, which Canada could join later.

What does the trade agreement mean for specialty crop growers? While President Trump praised the agreement for the good it will do for American farmers, it doesn’t offer any specific provisions or protections for specialty crop growers.

Mike Stuart, President of Florida Fruit & Vegetable Association (FFVA), said in a statement on the agreement: “This is not the outcome we have worked for. However, the president has promised to help safeguard farmers, and we will continue working diligently and persistently with the administration on solutions to stop Mexico’s unfair trading practices and to help our fruit and vegetable industry survive. For almost 20 years, Mexico’s unfair trading practices have taken their toll on producers in the Southeast. Mexico swamps the U.S. market during our narrow marketing seasons at prices far below our production costs. What’s more, Mexico’s president-elect recently promised a significant increase in government subsidies to Mexican farmers to plant a million more hectares of fruit.”

A quick scan of stats show clearly what Florida growers are up against. Take strawberries for example. Mexico has increased acreage by more than 60% since 2011. And Mexico’s government is supporting aggressive growth in the sector, announcing in 2013 the intention to double its acreage to 43,000 acres. The country has subsidized this growth as well.

Similar stats can be shown for Florida tomatoes and peppers. This past season, Florida blueberry growers suffered lower prices because Mexico is increasingly moving into their market window. The latest numbers show Mexico exported 43.5 million pounds of blueberries into the U.S. last season. For reference, Florida and Georgia blueberry growers only produced half of that amount.

How would you grade the U.S.-Mexico Trade Agreement for specialty crop growers?

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Florida senators Marco Rubio and Bill Nelson sent a letter to Trade Representative Lighthizer expressing any trade agreement that expects to receive Congressional fast track would need to meet  certain parameters set out in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, also known as TPA, including “eliminating practices that adversely affect trade in perishable or cyclical products, while improving import relief mechanisms to recognize the unique characteristics of perishable and cyclical agriculture.”

In the letter, the senators noted: “To meet this [TPI] requirement, you originally proposed a provision that would let regional growers use seasonal data for antidumping and countervailing duty cases. However, all indications point to this new agreement with Mexico not meeting these goals. We must stress that a final NAFTA deal that fails to live up to the promises of the administration or fails to meet TPA guidelines, as set by Congress, will have a hard time winning Congressional approval.”