McALLEN, TX — Two things were readily apparent at the first-ever America Trades Produce Conference, held March 30-April 1 at the McAllen Convention Center, here.
The first was that interest in the conference was greater than anyone anticipated. Just a week before the event, John McClung, president of the Texas Produce Association, which co-hosted the meeting with the Fresh Produce Association of the Americas, was worried that no more than 100 attendees would show up. Instead, almost triple that amount turned out.
The second was that there are some natural barriers to trade between the United States and Mexico, primary among them language. At every session, translators sat in the rear of conference rooms, hurriedly whispering translated versions of presentations that were broadcast for closed-channel reception and recorded for posterity.
“If you live close to the border, you know it’s not easy,” Mr. McClung told attendees at a March 31 session titled The U.S. Mexico Relationship: It’s Complicated. “It’s like a marriage: not always smooth, sometimes it’s hard, sometimes it’s funny. But here we are, we’ve been together for a long, long time. There’s a 2,000-mile boundary between the U.S. and Mexico. Two languages, two cultures, two economic bases, two legal systems. Like the title says, it’s complicated.”
Roberto Coronado, an economist with the Federal Reserve Bank in El Paso, TX, demonstrated the link between the two countries with a series of charts graphing the U.S. and Mexican economies over the last few years, showing almost identical spikes and valleys.
“In McAllen, you’re sitting at the epicenter of the trade of produce,” Dr. Coronado said. “Mexico is the number one source of produce for the U.S. in many categories. Roughly 60 percent of fresh vegetables in the U.S. come from Mexico, and 34 percent of fruits.”
Theoretically, the highways that cross the countries at the border run both ways. In reality, just 18 percent of all U.S. exports go to Mexico, while 72 percent of total Mexican exports are destined for the United States, Dr. Coronado said.
There are also differences in the way the two countries view each other, explained Richard Wike, associated director of the Washington, DC-based think tank the Pew Research Center. While just 17 percent of Egyptians have a favorable view of the United States, 56 percent of Mexicans do, and that number plummeted from a post-2008 election high of 69 percent after Arizona enacted illegal immigrant legislation last year. By comparison, 97 percent of Kenyans view the United States in a favorable light.
Meanwhile, “Mexico’s on the bottom half of the list of countries vis a vis the U.S. view of major nations, ahead of Russia, Saudi Arabia, Pakistan and Iran,” Dr. Wike said. Just 44 percent of Americans view Mexico favorably. Iran ranks last at 11 percent and Canada is first at 84 percent. “I think what we can take away from this is there are divided views about Mexico, but there is a fair amount of interest.”
The conference schedule was hectic, with little downtime. After a golf tournament, field tours and an evening reception March 30, attendees had a packed agenda March 31 and April 1, with general sessions and workshops focusing on topics like the Mexican-U.S. trade outlook, the tomato suspension agreement that regulates pricing of that commodity, myths about Mexican produce, congestion at the ports along the border, security and safety in Mexico, food safety across borders, emerging technology, microclimates, phytosanitary issues and getting paid across borders.
During a March 31 breakfast session, U.S. Ambassador Isi A. Siddiqui, chief agricultural negotiator for the Office of the U.S. Trade Representative, asked attendees to “help me understand the issues you face” and reminded everyone that “73 percent of the world’s purchasing power is outside the U.S.”
In 1975, the U.S. agriculture export market to Canada and Mexico was valued at $2 billion. Last year alone, trade with Mexico was worth $24.5 billion, Ambassador Siddiqui said. The United States exported $110 billion worth of agricultural products worldwide last year, and that total will rise to $135 billion this year, he said.
“During the Clinton administration, it was $60 billion,” he said. “We had hoped to hit $100 billion by 2010.”
“NAFTA has been a key ingredient” in doubling the worldwide totals of U.S. exports in the last two decades, Dr. Siddiqui said. However, he noted, the United States must “not only negotiate agreements, but make sure we have a level playing field.”
One inescapable discussion at the conference was the impact of the Mexican drug cartel wars now raging throughout that country, with a significant portion of the violence occurring along the U.S.-Mexico border. While both sides are adamant that the fighting has not hampered the trade of produce, both agree that is has changed the way business is done.
Even as some of the Mexican delegates downplayed the effects of the drug wars, “There’s no doubt the violence has had a significant impact on the Mexican side of the border,” Dr. Coronado said. “If violence continues along the border, it’s not good news at the end of the day. If one side goes down, the other will go down. It has tremendous implications to us on this side of the border.”
Despite some differences of opinion, the sessions on safety and security in Mexico were calm, rational and free of rancor, perhaps in part due to a plea from Tom Stenzel, president of the United Fresh Produce Association, for “a positive discussion.” He added, “We don’t talk about [drug violence] in public, but we talk about it in private. Let’s have a good discussion. We may have concerns about doing business in Mexico, but not doing business with Mexico.”
Ian Vega, director of Mexico for Edinburg, TX-based Frontera Produce, lives in Mexico and said that his travels regularly take him throughout that country. The warring drug cartels “are not stopping the country,” he said. “The growers in Mexico are still investing, they are improving their facilities, and they are implementing their best practices. We can see it up here [in the United States] because in terms of volume, we haven’t seen any decreases. I must admit it’s sad for me to say that in Mexico, we’ve been trying to live with the situation. We see every day the news and we hear things and we see things, but the produce industry in Mexico is working and working hard. At some point, this [violence] will stop — it’s not going to be forever, so we’re focusing on that. The federal and state governments in Mexico are doing their job, and personally I think they’re doing a very good job and won’t stop. Everybody’s trying to lower the risk, but everybody’s working down there. The U.S. market is going to keep seeing a lot of product from Mexico coming up in the next year.”
Eric Viramontes, chief executive officer of the Asociación Mexicana de Horticultura Protegida A.C., known more commonly by the acronym AMHPAC, which is based in Culiacán, Sinaloa, Mexico, and which represents the Mexican protected horticulture industry, said, “The biggest problem is thinking this is just a problem in Mexico. A lot of people are making the decision and going to work for these cartels because there’s a lack of opportunity and a lack of jobs and they turn to this to make an income. This is a problem that’s affecting the whole continent; the cartels are in Mexico, the consumption is in the U.S. The way we can contribute is to keep generating jobs and work as an industry, making it as big as we can make it and realizing even though our countries have borders, this industry does not have borders.”