Dan Wheat/Capital Press
WENATCHEE, Wash. — Washington apple exports to Mexico are probably safe this season even if the North American Free Trade Agreement falls apart, the industry’s lead person on the issue says.
“I don’t see tariffs coming immediately if it all collapses. I think we would make it through this season without tariffs coming into effect, but we really don’t know. We will know more as we get closer to March,” Mark Powers, president of the Northwest Horticultural Council, told the Washington Apple Commission in Wenatchee on Dec. 14.
Mexico’s tariff would be 20 percent but Canada would have no tariff because of its most-favored-nation status, Powers said.
Washington exports nearly $500 million worth of apples, pears and cherries annually to Mexico and Canada, making NAFTA renegotiations a big concern, he said.
The majority of that $500 million is apples to Mexico, Washington’s largest apple export market. More than 10 million, 40-pound boxes of apples go there annually. The peak was 16 million boxes in 2014.
The Trump administration has been renegotiating the 1994 NAFTA agreement since June, seeking what it termed more equitable trade. A contentious issue is automobiles and auto parts. The initial goal was to have a new agreement by the end of December. Now that has slid to March.
That month is important so the issue is resolved ahead of U.S. congressional mid-term election campaigns and ahead of elections in Mexico, Powers said.
Also, the president’s trade promotion authority, which allows Congress only to approve or reject trade agreements without the ability to modify them, expires July 1, and the last vote to extend it was contentious, he said.
Powers said he’s “increasingly skeptical” of an agreement being reached by March. The situation “gets murky” if negotiations collapse and the U.S. withdraws from NAFTA, he said.
President Donald Trump, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer will make the decisions and remain favorably inclined toward a provision making it easier for Florida tomato producers and other regional producers to initiate anti-dumping cases against low-priced Mexican produce sold in the U.S.
“Mexico has made it clear there is potential for retaliation,” Powers said, adding that’s a big worry for not only Washington apples, but feed grains, meat, cotton, potatoes and many other commodities.
The Pacific Northwest congressional delegation has been helpful and works well together on trade, he said.
Powers said he has attended three of the six rounds of talks so far and will attend the seventh round in Montreal on Jan. 23-28.