FPAA: To Favor A Few Agribusinesses, US NAFTA Objective Would Hurt All Consumers

Statement from The Fresh Produce Association of the Americas, Nogales, Ariz.

A small group of politically connected, wealthy agribusiness firms from Florida are seeking concessions from the Federal government to effectively subsidize their industry by raising prices, an act that would deprive Americans of affordable fruits and vegetables. As a part of the NAFTA renegotiation, they want to change antidumping law to manipulate the free market in order to benefit regional, seasonal perishable agriculture industries. If successful, this tactic will result in lawsuits that would raise prices for U.S. consumers, while reducing availability, selection and quality in the supermarket aisle for items such as tomatoes, avocados, bell peppers, watermelons, strawberries and blueberries, just to name a few. In a time of rampant obesity and rising healthcare costs, this anti-market approach would hit Americans in the pocketbooks when they can least afford it. Pursuing such “trade protection through increased litigation” will also be at the cost of U.S. exporters when similar “seasonal suits” are brought by Canada and Mexico.

For further comment: Lance Jungmeyer, President, FPAA (520) 287-2707

For further reference:

US NAFTA OBJECTIVES: The U.S. introduced its NAFTA negotiating objectives on July 17, 2017. One objective is to “Seek a separate domestic industry provision for perishable and seasonal products in AD/CVD proceedings.” Learn more here: https://ustr.gov/sites/default/files/files/Press/Releases/NAFTAObjectives.pdf

CONSUMER IMPACT: Any actions to decrease imported supplies will raise consumer prices dramatically. The purpose of a regional, seasonal, perishable tariff would be to limit the supply of imports. A study from AC Nielsen/Perishables Group showed that if Mexican tomato supplies were cut in half in the December through May winter window, it would result in consumer prices rising from an average of $2.16 a pound to $3.31 a pound. In one scenario, which analyzed the possibility of Mexican tomatoes being excluded altogether, Dr. Tim Richards, Morrison Chair professor of Agribusiness at Arizona State University, stated: “We found that if Mexican imports are excluded from the U.S. market, retail prices during the December-May timeframe can be expected to rise by 97.9 percent for hothouse round, 96.9 percent for hothouse vine, 61.3 percent for snacking, 217.2 percent for Roma, and 52.1 percent for field tomatoes.”

U.S. FRUIT/VEG EXPORTS AT RISK: U.S. fruit and vegetable exports to Mexico and Canada have grown under NAFTA. For instance, Mexico has become the No. 1 export market for U.S. apples, purchasing more than $250 million in U.S. apples a year. A trade measure that favors regional growers may be applied against U.S. exporters of fresh produce.

THINK TANK PERSPECTIVE: The Peterson Institute, a free-market think tank, has weighed in:

https://piie.com/blogs/trade-investment-policy-watch/nafta-mischief-fruits-and-vegetables

Source: The Fresh Produce Association of the Americas