Grape industry looking to resolve dispute with Mexico
by Rand Green | March 11, 2010
A retaliatory tariff on California grapes imposed last year by Mexico in
response to a U.S. ban on cross-border trucking cost the industry $43 million
in 2009, and industry leaders as well as a congressional coalition are pushing
hard to get the situation resolved before the start of the 2010 grape season,
according to Barry Bedwell, president of the California Grape & Tree Fruit
League in Fresno, CA.
"We now have the numbers from 2009 on fresh grapes that really show the
impact of that 45 percent tariff," said Mr. Bedwell. "We had estimated that we
could lose 75 percent of our market, and in fact, we lost right at 70 percent
[in volume]. In value, we lost a little over 72 percent."
Mexico is the California table grape industry's second-largest export trading
partner. The volume of grapes exported to Mexico dropped from "about 5.5
million boxes in 2008 down to 1.6 million in 2009, and the value went from
almost $60 million to just over $16 million. So we got hammered," Mr.
Bedwell said. "We know it is more important than ever as we go into another
crop year to get that tariff lifted. Our goal is to get something done here in
advance of the  fresh grape season, but we also tell other people in
other commodities that even though they may not be affected right now, the
Mexicans are considering this concept called carrouselling," which means the
tariff might be dropped on some commodities but others may be added to
the list. "We should all be working for a resolution to this as soon as
possible," he said.
"The Teamsters have been spearheading the effort to stop Mexican trucks
[from entering] the United States," Mr. Bedwell said. The Teamsters claim it is
a truck safety issue, but "the U.S. Department of Transportation did a study
[showing] that Mexican trucks were as safe as or safer than their U.S.
counterparts, so that argument doesn't hold water. It really is because the
labor unions don't like free trade agreements."
On Feb. 2, American Trucker published an article quoting James Hoffa,
general president of the International Brotherhood of Teamsters, as saying,
"We got the border closed to unsafe Mexican trucks and we're keeping it
closed. The Teamsters did that, nobody else did that -- the Teamsters did
"But we've got our work cut out for us," Mr. Hoffa continued, blaming what he
called "the tea-baggers" and "the far, far right" for their opposition to the
Contrary to the Teamsters' claims, "it has never been a safety issue," said
Allison Moore, communications director for the Fresh Produce Association of
the Americas in Nogales, AZ.
That is a "false fear" put out by the unions "just to save their own position
instead of learning how to be competitive," Ms. Moore said. "Shame on the
people that actually buy into it."
The FPAA's position "has always been that we see completely the position
Mexico is taking," Ms. Moore said. "It is important to have the United States
live up to its trade agreement obligations." The United States "isn't bashful
about forcing other countries to live up to their obligations in the trade
agreement," she added.
On March 1, a group of 56 congressional representatives, led by California's
Dennis Cardoza and including "all eight that represent our membership in the
Grape & Tree Fruit League, both Republicans and Democrats," sent a letter to
the secretary of transportation and the U.S. trade representative "to try to get
this issue resolved as soon as possible," said Mr. Bedwell.
That letter states, in part, that "administration officials have repeatedly
expressed confidence that a resolution to the current dispute could be found
that would fulfill our obligations to Mexico" under NAFTA, but "to date, the
administration has not shared any of the principles or the parameters of a
proposed plan. The current situation is unsustainable and untenable."
Kathleen Nave, president of the California Table Grape Commission, told The
Produce News March 10 that there now seems to be some progress.
The 45 percent tariff on table grapes "has had a devastating effect on the
California table grape industry's ability to ship fruit into that market," Ms.
Nave said. But the Mexican government "has made it very clear that the
United States is obligated under NAFTA to put a cross-border trucking
program back in place and that "the U.S. has been remiss" in not doing so.
But they have made it "very clear that is what it would take to remove the
tariff," she said.
"The lack of adherence to our obligations under NAFTA is a problem and has
been for a very long time." Ms. Nave continued. "We have been working on
this in Washington, DC, since last June." Fortunately, "there has been some
progress made," and "we are happy to see that the issue has moved to the top
of the Obama administration's trade agenda. The administration is clearly
moving forward to address the issue."