PHOTO: Tony Dimare, vice president of Homestead-based Dimare Co., joined others at the conference expressing concerns about NAFTA’s effects on Florida growers, during an issues forum on the renegotiating process for the trade agreement.
AMELIA ISLAND, Fla. — The day before the latest round of NAFTA renegotiation talks began Sept. 23, the Trump administration signaled to Congress it would seek specific provisions for seasonal and perishable products.
At the same time, the U.S. government plans to enact an “early warning system” to notify specific business sectors if and when other countries are using unfair trade practices when exporting to the U.S.
The Trump administration is interested in investigating whether trade partners have support from their governments, undercutting the ability of U.S. companies to compete on the same level — a charge that Florida vegetable growers have leveled against protected-environment vegetable growers in Mexico.
Carolyn Gleason, who heads the Global Regulatory Practice Group at McDermott Will & Emery, updated Florida growers Sept. 26 on the NAFTA renegotiations at the Florida Fruit and Vegetable Association’s annual conference. Gleason, who has worked with the association on trade issues, said industry leaders are working tirelessly on NAFTA 2.0 talks.
During the Sept. 25-27 conference, association president Mike Stuart was in Ottawa, where the third round of five-day talks took place. The next round is scheduled for Oct. 11-15 in Washington, D.C.
Gleason said that while talks are proceeding at an unprecedented rate for trade issues, even if the NAFTA countries agree on all proposals, the best-case scenario for implementation is 2019 or 2020. And while there have already been more than two dozen negotiation chapters tabled — specific issues that trade partners expect to be addressed — the real “horse trading” on the most contentious issues will happen at the last stages, when Gleason expects Trump to become personally involved in negotiations,
The seasonal and perishable products provisions fall under “antidumping and countervailing duty” proceedings, and would address trade issues specific to fruits, vegetables and other crops. Among other things, it would allow trade law enforcers to consider crops on a seasonal cycle, rather than a calendar year import cycle.
Gleason pointed to three specific crops and how they changed from 2000-2016 (NAFTA was established in 1994):
- Imports of Mexican tomatoes grew from 1.2 billion pounds to 2.3 billion pounds, while U.S. production dropped from 2.7 billion to 1.7 billion pounds;
- Imports of Mexican strawberries grew from 76 million to 216 million pounds; and
- Imports of Mexican bell peppers went from 327 million pounds to 860 million pounds.
“The specialy crop sectors in Florida, Georgia and elsewhere, the lifeblood business of many of you here today, take the understandable position that if these hemorrhaging losses under NAFTA aren’t soon stopped, there won’t be much of a U.S. seasonal and perishables sector to even defend in the coming years,” Gleason said.
Trump not only wants to modernize the trade agreement, Gleason said, he wants to address a $70 billion trade deficit with Mexico, and come away with a plan that can be used as a template for future trade agreements. She’s encouraged by Agriculture Secretary Sonny Perdue’s statements on NAFTA’s effects on certain agriculture sectors.
Tony Dimare, vice president of Dimare Co., Homestead, Fla., pointed out that although NAFTA forbids quotas, that issue must be addressed when “unlimited” amounts of specific products are being imported into the U.S.
Gleason said Canadian and Mexican officials have said they’ll walk away from the negotiating table if quotas, tariffs and increased barriers at borders are part of the deal.
Gleason cautioned specialty crop growers from other parts of the country — some California growers export to Canada and Mexico — from suggesting that if the new deal seeks to limit imports from Mexico, their crops could face duties going south.
“There’s no sense whatsoever in putting a bullseye on your sector,” she said.
Labor will also be an issue addressed in NAFTA talks, although those points will be non-binding, but more of a measure to encourage coordination between the countries.
Responding to a question about what type of leverage the U.S. has when negotiating with Mexico, Gleason pointed to the large trade deficit with that country, and negotiators have a keen interest in preserving that.