Concessions to Southeast producers will undermine USMCA and could raise prices for consumers
On September 1, 2020, the United States Trade Representative released its plan which includes 201 investigations on blueberries and potentially on strawberries and bell peppers. The plan also outlines actions that would impact U.S. companies distributing imported produce. Following is a statement from the Fresh Produce Association of the Americas (FPAA) on this issue.
“This politically motivated action directly undermines the new U.S. Mexico Canada Agreement, positioning the U.S. as an unreliable trading partner despite any trade agreements they negotiate. Mexico is our largest trading partner, with a climate ideally suited for fresh fruits and vegetables. Sadly, partisan politics failed to consider the best interests of American farmers, American businesses, and American consumers who will likely see increased food costs and lower overall farm exports. The complaint was based on an intentionally misleading propaganda campaign from Florida and Georgia growers based on rhetoric without data that supports their claims.”
Here are the facts about seasonal fresh produce:
Importations of fruits and vegetables have not damaged the market prospects of the Florida and Georgia growers, despite the claims of Southeastern growers. Indeed, U.S. Secretary of Agriculture and former Governor of Georgia Sonny Perdue stated that a University of Georgia Policy Brief on the impact of the USMCA on Georgian’s small fruit and vegetable industries was “flat wrong” where “researchers came up with imagined scenarios in which they say a set of fruit and vegetable farmers would be vulnerable to competition.”
Imposing Safeguard Remedies on Top Trading Partners Could Result in Retaliatory Actions on US Agriculture. Using this rarely invoked trade law would impose costly tariffs on seasonal produce, would raise consumer prices, and would launch numerous and unending “tit for tat” trade wars that could imperil nearly $20 billion in US agricultural exports to Mexico, as well as U.S. global agriculture exports which totaled $140 billion in 2018.
Mexico has consistently honored trade agreements, including about the use of subsidies to their own industries, research shows. As signatories to WTO, the U.S. and Mexico agreed not to surpass certain levels of agriculture subsidies, and, so far, both have honored that commitment. And, according to a recent University of Arizona analysis, since 1995, the U.S. has used up to 41% of its allowable subsidies, while Mexico has averaged just 2%. The analysis did not include the recent $28 billion in aid to U.S. farmers in light of ongoing U.S. trade tensions with major export markets including China, which could put the U.S. above WTO-allowed limits for trade subsidies.
Even USDA’s own analysis of recent subsidy programs in Mexico show how insignificant the investments are compared to U.S. agriculture. Furthermore, these programs focus on corn, wheat, livestock, milk, dried beans, and other grain commodities for the small and medium size growers in the poorest regions of the country.
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About the Fresh Produce Association of the Americas
Founded in 1944, the Fresh Produce Association of the Americas (FPAA) is a nonprofit trade association headquartered in Nogales, Arizona, that represents over 120 U.S. member companies involved in importing and marketing fresh fruits and vegetables grown in Mexico and distributed across North America and the world. www.freshfrommexico.com