Florida and Mexico are having a food fight over tomatoes and other fresh produce. Will farmers in California and Washington get caught in the crossfire?
That’s one question that swirls around the final negotiations between the Trump administration and Mexico on a revamped North American Free Trade Agreement. Growers of tomatoes, strawberries and peppers in Florida and the Southeast say they’ve been hammered by cheap imports of these crops from Mexico, particularly during winter months. They’ve lobbied the Trump administration to make it easier for them to bring “anti-dumping” and “countervailing duty” cases against Mexico in an updated NAFTA agreement.
But growers on the West Coast fear such a provision would prompt Mexico to retaliate, making it harder for them to sell south of the border. Mexico is the United States’ No. 1 market for apples, pears and sweet cherries. Washington state is the nation’s No. 1 producer of all three of these fruits. California is also a major producer, and the nation’s No. 1 cultivator of tomatoes.
“There’s not a consensus view among growers in the U.S. on this issue,” said Michael C. Camuñez, chief executive of Monarch Global Strategies and a former assistant Commerce secretary. If Florida and Georgia growers were allowed to go after Mexico, he said, “it would open the door toward retaliation against other products from the United States.”
U.S. and Mexican negotiators are scrambling this month to strike a NAFTA deal, so they can bring Canada on board and meet deadlines to give Congress a required 90 days notice on any negotiated agreement. But Camuñez says “there are still a number of issues that could cause this agreement to go sideways,” including claims of unfair trading in farm goods.
While tomatoes might seem like unlikely ingredients in a cross-border dispute, they have a powerful constituency in Florida, which has been producing them since the late 1800s. While California is the leading producer of tomatoes for ketchup and other processing, Florida outranks it in annual production value of “fresh market tomatoes,” which fetch a higher price in the winter. In 2016, the value of the Florida tomato crop was $382 million, followed by the state’s strawberry crop at $364 million, according to the U.S. Department of Agriculture.
Florida is also a crucial swing state for anyone running for president, including Trump, who campaigned on revising the 24-year-old NAFTA pact to be more friendly to U.S. industry and farmers.
Following talks in Washington earlier this month, both U.S. and Mexican negotiators said they made progress in resolving disagreements over automobile tariffs and other issues. “I think we are going to get there with Mexico in a relatively short order,” Gregg Doud, the U.S. chief agriculture negotiator, said Tuesday to a sugar industry conference in Michigan.
But when Doud was asked about the provision sought by Florida and Georgia growers, he declined to comment, stating the negotiations are ongoing.
Overall, U.S. agriculture has benefited from NAFTA. From 1992 to 2016, U.S. agriculture exports to Canada and Mexico grew from $8.7 billion to $38 billion, according to the Congressional Research Service.
But not all U.S. farmers have benefited. In Florida, farm land devoted to tomatoes dropped from 45,200 acres in 2005 to 32,000 a decade later. Mexico now tops Florida in U.S. market share of strawberries, peppers and tomatoes, a sea change from the 1990s.
Lisa Lochridge, a spokeswoman for the Florida Fruit & Vegetable Association, said Florida growers have long positioned themselves to grow specialty crops during season when few other U.S. growers could produce them. But Mexico has cut into that market niche, partly because of it seasonal climate and also because of NAFTA.
“We’ve said all along, Florida producers and those in the Southeast can successfully compete in a fair global marketplace,” said Lochridge. “That’s not the problem. But NAFTA, as it stands now, creates an unfair trade environment that has severely hurt Florida specialty crop producers.”
Southeast growers have two beefs with Mexico. They accuse Mexico of “dumping” fresh produce on the U.S. market at prices lower than production costs, depressing prices. They also say the Mexican government has subsidized various farm infrastructure, helping farm companies build more than 30,000 acres of greenhouses in Mexico.
Mexican officials reject these claims. They say Southeast growers have been hurt by a lack of innovation and natural disasters, including five damaging hurricanes in 2004 and 2005. In negotiations, Mexico has rejected any discussion of making it easier for Southeastern growers to bring cases of unfair trade practices.
Under the current NAFTA, unfair trade cases can only be brought if growers accounting for a certain percentage of nationwide production year-round agree to the proceedings and can bolster their claim with three years of annual data. Southeast growers want the language changed so that particular farm regions can bring cases based on seasonal data, which would give the Southeast much more ability to target Mexico.
The Trump administration has been open to the growers’ arguments, which congressional delegations from Georgia and Florida have helped highlight. Before Secretary of State Mike Pompeo visited Mexico last month, Florida Sen. Marco Rubio urged Pompeo to press Mexican officials on the issue. “Any modernized NAFTA agreement must reflect a commitment by the Mexican government to reduce subsidies and dumping of seasonal and perishable produce,” Rubio wrote in a July 11 letter.
The dispute is complicated by the various alliances of U.S. agriculture, and its integration across North America. Largely because of NAFTA, many U.S. producers of specialty crops have set up operations in Mexico, to reap the benefits of growing “counter-seasonally.” California-based Driscoll’s, for instance, grows and sources berries in both Mexico and the United States, and has flourished because of rising year-round demand for these “superfoods.”
Washington and Oregon growers also have a big stake in the Mexican market, and have lobbied their delegations to oppose the NAFTA provision sought by Southeast growers.
“We expect that Canadian and Mexican industries, including the tree fruit industry, may take advantage of such a provision to restrict exports of U.S. products,” wrote Sen. Maria Cantwell of Washington, and a bi-partisan group of other lawmakers from Oregon and Washington, in letter last year to U.S. Trade Representative Robert Lighthizer. “Failure to consider these concerns will leave our tree fruit growers and other producers...vulnerable to tariffs.”
In California and elsewhere, farmers are already feeling the pinch by Mexico and China’s tariffs against U.S. dairy products and other farm goods, retaliation against Trump’s duties on imported steel and aluminum. “Protectionism begets protectionism, which is what makes these provisions so concerning,” said Camuñez, the former Commerce assistant secretary.
So far, it doesn’t appear that Lighthizer and his negotiators have raised the seasonal produce issue in their most recent talks with Mexico, but “it is still hanging out there,” said Camuñez. Deadlines are growing tight, in part because departing Mexican President Enrique Peña Nieto reportedly wants to conclude negotiations on NAFTA — to the satisfaction of Mexican business interests — before president-elect Manuel López Obrador takes office in November.
Since Congress requires a three-month notice on any forged trade deal, Mexico, Canada and the United States would need to reach agreement by Aug. 27, according to Lori Wallach, a veteran trade watcher affiliated with Public Citizen, a liberal advocacy group based in Washington.
“Time will tell,” said Lochridge, on the prospect her Florida growers will get some real relief in the NAFTA talks. “We have been optimistic. We’ve enjoyed the support of our congressional delegation. The administration has heard us...But this is a complicated issue and its doesn’t enjoy support from all sectors of agriculture.”