U.S. Growers Feel Crunch of Mexico Apple Sanctions

A bitter standoff south of the border illustrates how much is at stake in the battle for the global apple market.

Last year, Mexican apple growers complained that U.S. apples were being dumped in their markets at prices 50% lower than in the U.S.

On Sept. 1, the Mexican government upheld the growers’ complaint and levied preliminary dumping penalties of 101% on the U.S. fruit. That priced U.S. apples out of the $75-million-a-year Mexican market by doubling their cost to Mexican consumers.

Now Washington apple growers--who account for 94% of all U.S. apple exports--have sought help from the Clinton administration in a desperate bid to convince the Mexican government not to shut the door to one of their fastest-growing markets.

“Our view is that the imposition of this duty is a blatantly protectionist action on the part of Mexico’s government and is not warranted by the facts in this case,” said Kraig Naasz of the Yakima, Wash.-based Northwest Horticultural Council, an industry lobbying group.

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This trade spat has serious implications for California apple growers, even though they are not currently selling their fruit to Mexico. If the penalties hold, the Washington apples that normally would have gone to Mexico will be sold elsewhere, depressing prices worldwide.

“Those apples will go someplace, and that someplace will be in the markets we’re in,” said Kenton Kidd, president of the California Apple Commission. “We only ship 8 million boxes [of fresh apples] in a year’s time. If you throw 6 million boxes into an area where you’ve got your own apples, it’s devastating.”

And in the long run, the punitive action would eliminate a market California apple growers hoped to develop once they were able to work out a pest-eradication program that satisfied the Mexican government and was not too costly.

The apple conflict has been building for several years. In the early ‘90s, Pacific Northwest growers got permission to sell fruit to Mexico. Apples quickly became Washington state’s biggest export, with Mexico consuming as many as 8 million boxes of Red Delicious apples annually before the economy was crippled by the peso crisis in late 1994. Now Mexico consumes more than 5.5 million boxes of Washington apples a year and is the largest U.S. export market, ahead of Taiwan and Canada.

Apple industry officials say prices for U.S. fruit have already fallen as a result of the uncertainty over the Mexico situation. The full brunt of the action will be felt next month, when the primary marketing season for apples begins.

In the meantime, U.S. apple growers are lobbying the Clinton administration to step up the pressure for a quick resolution. Talks are underway between the U.S. trade representative’s office and Mexico’s Ministry of Commerce and Industry.

The Mexican government has collected data from growers on both sides of the border and is expected to schedule a public hearing in Mexico City in the coming weeks. After that, the government will issue its final ruling on the dumping case.

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U.S. growers are reassessing their support for trade liberalization measures as a result of the conflict. In a recent letter to President Clinton, a group of U.S. senators noted that this “unwarranted and Draconian action” by Mexico had “shaken the apple industry’s confidence” in the North American Free Trade Agreement and the World Trade Organization.

That message is bound to get the president’s attention, since he is in the middle of a tough battle to win “fast-track” authority for negotiating future trade agreements.

Evelyn Iritani can be reached by fax at (213) 237-7837 or by e-mail at evelyn.iritani

@latimes.com