Decision Helps Shield American Consumers From Food Inflation
The Fresh Produce Association of the Americas applauds the U.S. Trade Representative for rejecting the Section 301 Trade Investigation petition from the Florida Congressional delegation.
“The claim was meritless from the onset,” said Lance Jungmeyer, President of Nogales, Ariz.-based FPAA. “USTR absolutely made the right decision to reject the baseless request from Senator Rubio, who has made this an election-year issue.”
A Supermarket Disaster Averted
If USTR had initiated a 301 Investigation that was not supported by facts that could have resulted in tariffs or quotas, it could have drastically added to food inflation by increasing the price of fruits and vegetables at a time when Americans can least afford it. Such an action would have also resulted in retaliatory tariffs or quotas on American farmers who export to Mexico, America’s second largest export market.
In its filings with USTR, the FPAA cited numerous reasons to reject the petition.
Trade Issues Between the U.S. and Mexico Should be Discussed under the Current USMCA Mechanisms, Not Unilaterally
The USMCA and its dispute settlement mechanism are designed for regional cooperation between the U.S., Mexico, and Canada. The USMCA should preempt the U.S. from taking unilateral actions like Section 301 investigations against its closest allies Mexico and Canada.
The petition did not identify an “unfair act” by Mexico and instead relied on vague and baseless references to government subsidies using inflammatory language without any supporting data. Florida Members of Congress repeatedly invoked phrases like “unfair subsidies,” “unfair trade-distorting practices,” “national security,” and “unfair labor,” without providing reasonable evidence or context.
Mexico has consistently honored trade agreements, including about the use of subsidies to their own industries, research shows.
While the Florida delegation cited “unfair subsidies,” they ignore the fact that U.S. agriculture is far more subsidized than Mexican agriculture. According to a recent University of Arizona analysis1, since 1995, the U.S. has used up to 41% of its allowable subsidies, while Mexico has averaged just 2%.1 Taking unilateral trade action against Mexican agriculture products would expose the U.S. to retaliatory action against U.S. exports of agriculture products that have similar and greater subsidies.
The Florida petition was the latest of several failed trade actions, while Florida continues to ignore their own agriculture challenges.
Florida growers and politicians have relentlessly targeted U.S. importers of Mexican produce in recent years without acknowledging changes in US consumer preferences that now favor fresh produce items like vine-ripened tomatoes and colored bell peppers that Florida growers do not offer. Under USMCA negotiations, they attempted to change Anti-dumping/Countervailing duty laws, an effort rejected by Canada, Mexico, and many U.S. agriculture export groups. They have also requested numerous safeguard (Section 201) and fact-finding (Section 332) investigations.
By an unprecedented unanimous vote, the U.S. International Trade Commission ruled that blueberry imports, including those from Mexico, have not injured U.S. industry. USITC and Florida researchers have also determined that production in Florida has been hampered by high costs of production, limited availability of ag workers, weather-related volatility, and pest pressures that have had far greater impact limiting Florida’s competitiveness. Pursuing baseless trade actions against Mexican imports would not improve the Florida growers because these other factors would still limit their competitiveness.