Funding cuts for Mexican truck program led to retaliatory efforts

By WES SANDER

Capital Press

While President Barack Obama talks up an exporting plan that includes finalizing trade deals with Colombia, Panama and South Korea, specialty ag producers continue agonizing over a lingering trade conflict with Mexico.

Congress cut funding in 2009 for a pilot program that allowed some Mexican trucks to transport goods in the U.S. as provided by the North American Free Trade Agreement. That led the Mexican government to slap retaliatory tariffs of between 10 and 45 percent on 89 separate items representing $2.4 billion in trade.

The tariffs covered a long list of Western farm products, including Christmas trees, pears, frozen potatoes, onions, grapes, strawberries, cherries and apricots.

Last year, lawmakers restored the funding, which producers hope will lead to restoring the trade relationship. Now it's in the hands of the Obama administration, said Josh Rolph, director of national affairs with the California Farm Bureau Federation.

"We're encouraged by the talk of increasing exports, but there's been quite a bit of talk over the last year," Rolph said. "We're really hoping something can be done soon to fix this."

The situation is seen largely as a trucking issue, and agriculture representatives haven't participated in any efforts to solve the situation, Rolph said.

The move to cut the program's funding, introduced by Sen. Byron Dorgan, D-N.D., was supported by U.S. labor unions. The National Farmers Union supported Dorgan's amendment, citing safety concerns.

More than a quarter of the 89 items on Mexico's tariff list are produced in California. They amount to about $214 million in export sales in 2007 numbers, accounting for around 3,000 jobs in the state, Rolph said.

The list ranges from wines and fresh produce to beauty products and household appliances. Fresh produce includes onions, lettuce, almonds, pears, apricots and strawberries.

Growers in Washington and Oregon say Mexico accounts for between $50 million and $60 million in annual pear sales, and takes nearly 2 million boxes of cherries. Nearly half of the $83 million in frozen potatoes shipped to Mexico come from growers in Washington.

The trucking program has been in the works since the agreement was signed in the mid-1990s.

"They've been almost apologetic that they had to do this," Rolph said of Mexican trade officials. "Fifteen years goes by, and Mexico was just fed up."

"There really is no excuse for North America not to honor its commitment under the North American Free Trade Agreement," said Barry Bedwell, president of the California Grape and Tree Fruit League.

Reps. Dennis Cardoza of California and Rick Larsen of Washington are collecting lawmakers' signatures for a letter asking administration officials to resolve the conflict. The note to lawmakers describes the "hundreds of domestic farmers and manufacturers (who) have been dealt a significant blow from the retaliatory tariffs imposed by Mexico.

"Some of these businesses may not make it through another growing season or calendar year," it states.