Apple Growers Reach Accord With Mexico
Settling a costly trade dispute, U.S. apple growers have reached a compromise with Mexico that allows them to resume shipments to the growing market south of the border.
Under the plan, announced Friday, Mexico will drop a stiff 101% tariff that it imposed last September, pricing U.S. Red and Golden Delicious apples out of the market. U.S. producers, in turn, will agree to charge a minimum price, thereby making it easier for Mexican apple growers to compete.
The agreement, effective immediately, primarily affects growers in Washington, who account for nearly 95% of U.S. apple exports. They criticized the imposition of a price floor, saying it provides rivals such as Chile and New Zealand with a chance to undercut them.
“It’s bittersweet news,” said Chris Schlect, president of the Northwest Horticultural Council, a lobbying group in Yakima, Wash. “But given the current legal, political and practical reality, it’s the best we can hope for.”
Although California growers do not ship fresh apples to Mexico, the agreement will benefit them by reducing a domestic oversupply that has driven down prices and slashed profits for the overall industry.
“A lot of those apples [that Washington could not send to Mexico] ended up in our face,” said Kenton Kidd, president of the California Apple Commission in Fresno.
Northwest growers shipped 5 million to 6 million 42-pound cartons of apples to Mexico during the 1996-97 season, and the market had been building as Mexico’s economy recovered from the peso crisis of late 1994. The market was worth $90 million to $100 million a year, Schlect said.
The loss of the Mexican market was compounded by the financial crisis in Asia, which has pummeled apple sales in some markets.
The agreement, reached after four days of round-the-clock negotiations in Mexico City, lifts a cloud from U.S. growers.
A year ago, Mexican producers complained that they were being harmed because U.S. apples were being dumped in their markets at prices well below production costs. In a preliminary ruling last September, Mexico’s Ministry of Commerce and Industrial Development determined that U.S. apples were indeed selling at artificially low prices. The agency imposed the 101% dumping duties and continued to collect data from growers in both countries.
U.S. growers dispute the notion that they were dumping apples in Mexico and labeled the tariff “blatantly protectionist.”
As part of the compromise deal, Mexico has agreed to suspend the anti-dumping investigation but said it will closely scrutinize apple imports.
“In the event of any violation, anti-dumping duties could be reimposed,” Jose A. Zabalgoitia, a spokesman for the Mexican Embassy in Washington, said in a statement.
The dispute shook the U.S. apple industry’s confidence in the North American Free Trade Agreement. But it is just one of several rifts related to agricultural trade between the two nations. In recent years, U.S. growers have fought imports of Mexican tomatoes and avocados.
