Updated: Saturday, September 11, 2010 9:29 AM
Washington potato growers hit hard by retaliatory tariffs
By DAVE WILKINS
Capital Press
A Senate appropriations bill would require the Obama administration to come up with a plan by Oct. 1 to resolve a trucking dispute with Mexico.
U.S. Sen. Patty Murray D-Wash., chairman of the Transportation, Housing and Urban Development subcommittee, included language in a fiscal 2011 appropriations bill that directs the secretary of transportation to reestablish a cross-border trucking program.
Failure of the administration to reinstate a cross-border trucking program prompted Mexico to impose retaliatory tariffs on 90 U.S. manufactured and agricultural products in March 2009.
"If the administration is unable to find a path forward on this issue, these tariffs will continue to send American jobs to other countries, such as Canada, as growers, processors and packers are forced to relocate," the bill stated.
The legislation directs the transportation secretary to report to the committee by Oct. 1 on the reinstatement of a program.
The bill passed the Senate Appropriations Committee in July and is headed to the full Senate for consideration.
Mexico's retaliatory tariffs have slammed several U.S. agricultural commodities, but perhaps none more than potatoes.
Tariffs of 20 percent on U.S. frozen potato products have been in effect since March 19, 2009.
The tariffs cost the industry more than $33 million in revenue during the 12 months ending in March, officials estimate.
"It's just phenomenal the amount of revenue that's been lost," Matt Harris, director of trade for the Washington State Potato Commission, said in an interview.
Washington is the nation's largest producer of frozen potato products, historically providing about half of all shipments to Mexico. Nearly 90 percent of the state's spud crop is used to make products such as frozen french fries and hash browns.
Because of the tariffs, major potato processors have begun sourcing Mexican shipments from Canada rather than U.S. plants, industry officials said.
The tariffs have resulted in reduced spud acreage in Washington state and were a major influence on ConAgra's decision to close a french fry plant in the state this summer, officials said.
"We see those acres not being grown in Washington any longer and being transplanted across the border in Canada," Harris said.
"The administration could have taken quick action to resolve this, but they haven't," he said. "They can fix it, but have just chosen not to."
Harris said the potato commission supports Murray's efforts to "hold the administration's feet to the fire," on the issue.
A U.S.-Mexico cross-border trucking program was originally scheduled to be implemented as part of the North American Free Trade Agreement in the mid-1990s, but has been derailed because of concerns about safety, labor and environmental impacts.
Mexican trucks are allowed to operate within about 25 miles of the U.S.-Mexican border. Some were allowed access to all U.S. roads under a short-lived pilot program begun in 2007.
Congress terminated the pilot program in early 2009.