Florida tomato group asks for greater protections against Mexico

Specialty crop growers need more trade protections against imported Mexican vegetables sold at below the cost of production, Reggie Brown told the House Agriculture Committee seeking input to renegotiate the North American Free Trade Agreement.

 “We are basically an industry under assault,” he said at a July 26 hearing on the renegotiation of the North American Free Trade Agreement.

Brown, executive vice president of the Florida Tomato Exchange, read prepared remarks and answered lawmakers’ questions. He said that while some parts of agriculture have seen benefits from NAFTA, Florida fruit and vegetable growers have not. Brown was the only speaker from the fresh produce industry who spoke at the hearing.

Beyond the objectives of a new NAFTA agreement, Brown said the Florida fruit and vegetable industry also is asking the Trump administration to pursue other “near-term remedial and political steps” to help reverse what it calls Mexico’s unfair practices as quickly as possible. Brown said that Mexico has been subsidizing and providing incentives to their producers to expand fruit and vegetable production at the same time produce from Mexico is sold at prices that constitute dumping.

The cost of production for Florida tomatoes is about $10 per 25-pound carton, he said. While Mexican exporters are not supposed to sell a 25-pound box of tomatoes in the U.S. at less than $8.30 at the border, Brown said that Mexican tomatoes can be found at terminal markets for as low as $5-6 per carton in certain times of the year.

“We have family farmers being forced out of business by unfair trade practices coming from our competitors to the south,” he said. “Once they are gone, they will never come back.”

With a wage rate in Mexico of about one-tenth of that in the U.S., Mexico has a built-in advantage, Brown said.  

Grower erosion

Mexico’s expanded exports of fruits and vegetables since 2000 has resulted in the loss of farm sales in Florida alone between $1 billion and $3 billion per year, Brown said.

While U.S. tomato production declined from 40% from 2000 to 2016, Mexican tomato volume grew by 166% in the same period. Years ago, Mexico competed with U.S. tomatoes from December to March, while now the competition from Mexican tomatoes is year-round, Brown said.

“Despite U.S. trade remedy measures and a long-standing Suspension Agreement, Mexican tomatoes continue to surge into the U.S. markets at unfairly low prices.

Brown called for a change in U.S. trade regulations that would permit seasonal fruit and vegetable producers representing less than a majority of U.S. production to more easily bring anti-dumping actions.

Specialty crop growers in states other than Florida are also suffering from the effects unfair trade, he said. 

“It is happening in states like Georgia with crops like blueberries and broccoli, it is happening in Texas with crops like watermelon, it is happening in California with the desert grape industry, it is happening to the asparagus industry in California,” he said in the hearing. “All the specialty crop producers in this country are having a problem with the current NAFTA trade relationship.”

During the hearing, Brown was challenged by Rep. Jimmy Panetta, D-Calif., who told Brown Salinas Valley growers and marketers were not under assault by NAFTA but were benefiting from it.

Brown said Florida fruit and vegetable producers were encouraged by the Trump administration’s “Summary of Objectives for the NAFTA Renegotiation” . Key points from that document that Brown highlighted include goals to:

• Improve the U.S. trade balance and reduce the trade deficit;
• Seek a separate domestic industry provision for perishable and seasonal products in anti-dumping/countervailing duty proceeding; and
• Require NAFTA countries to have laws governing acceptable conditions of work with respect to minimum wages, hours of work and occupational safety and health.

Brown also cited the Trade Priorities and Accountability Act of 2015, which he said establishes free trade agreement objectives specific to specialty crops. Those goals include eliminating practices that adversely affect trade in perishable or cyclical agriculture and ensuring that import relief mechanisms for perishable and cyclical agriculture are accessible and timely.

The U.S., Canada and Mexico are set to start the renegotiation of the North American Free Trade Agreement in August, with hopes of finishing talks by January.

Tags: Agriculture