Industry hoping for progress in Mexican trade dispute
by Joan Murphy | August 06, 2009
WASHINGTON -- With President Obama traveling to Mexico for a high-level summit, the produce industry is hoping the administration will bring a proposal to end Mexico's retaliatory tariffs against agricultural products put into place after a Mexican trucking program was abandoned earlier this year.
"At this point, we've heard there's a proposal, but it has not been shared with the private sector," said Ken Barbic of the Western Growers Association, who started last month as the group's new director of federal government affairs in Washington, DC.
Congress killed a two-year-old pilot program earlier this year that allowed some Mexican truckers to haul cargo into the United States. Mexican officials argued that killing the trucking program not only violated bilateral trade agreements but was unnecessary because studies showed that the trucks were safe on U.S. roads.
Once the trucking program was defunded by Congress, Mexico retaliated with up to 45 percent tariffs on a wide range of products, including many California-grown cherries, grapes lettuce, almonds, apricots and pears.
Since then, the Obama administration said it has been trying to come up with a resolution. "We continue to work to find a solution that addresses the concerns of Congress and is consistent with our international obligations," a spokesman for the U.S. Department of Transportation told The Produce News Aug. 5.
"Our message is that this comes at the worst possible time and we need a resolution immediately," said Josh Rolph, director of international trade and farm policy for the California Farm Bureau Federation. "We've been very nervous that there would not be a resolution before harvest" begins for grapes, he said. The bulk of the grape harvest is expected to begin in late summer.
Normally, California table grapes would be shipped to Mexico later this month, but most in the industry think that very few will be shipped there, said Barry Bedwell, president of the Fresno-based California Grape & Tree Fruit League, who traveled to Washington in late July to discuss resolving the issue and who called the California table grape industry "collateral damage" in the trade dispute.
The 45 percent tariff may leave grape growers, who rely heavily on the Mexican export market and are already coping with low prices on the domestic market, to not harvest the crop this year unless there's a resolution to the crisis, said Mr. Barbic.
Mexican officials were expected to raise the issue during President Obama's Aug. 9-10 meeting in Guadalajara with Mexican President Felipe Calderon. "I hope the administration takes some sort of proposal to Mexico," Mr. Rolph said Aug. 5.
Unfortunately, he added that the stories of how the industry is being damaged by the tariffs are not getting out to the American public. To help get the word out, 140 companies and organizations launched a new Internet site (www.keepusjobs.org) that urges citizens to write lawmakers to resolve the trade dispute before U.S. jobs are lost.