WENATCHEE, Wash. — The potential loss of tens of millions of dollars in apple exports to Canada and Mexico was avoided with resolution of the country of origin labeling trade dispute with the two countries.
The World Trade Organization had approved Canada and Mexico imposing $1 billion in tariffs on U.S. products. That was averted when Congress repealed COOL in the omnibus federal spending bill Dec. 18.
“This is extremely good news for the U.S. apple industry and we thank Congress for fixing this critical trade problem,” said Mike Wade, U.S. Apple Association board chairman and general manager of Columbia Fruit Packers in Wenatchee.
The association said the omnibus bill also ensures continuity of federal Market Access Program dollars for the Washington Apple Commission and Specialty Crop Research programs and grants and crop insurance for the industry.
Under COOL it cost Canadian beef producers over $100 more per head to have cattle slaughtered in the U.S. because feedlots and slaughter houses had the added expenses of tracking cattle to label beef by country of origin.
Apples and cherries were on a preliminary list of Canadian tariffs and while Mexico had not released a list, apples, pears and cherries may have been on it, said Kate Woods, vice president of the Northwest Horticultural Council in Yakima.
“We don’t know what the tariff rate would have been and how long it would have lasted, but it would have cost the industry tens of millions of dollars,” said Mark Powers, the council’s executive vice president.
Mexico and Canada are the Washington apple industry’s top export markets.
Washington had average annual exports to Mexico of $230 million in apples over the past three years, $70 million in pears and $5 million in cherries, Woods said.
Average annual exports to Canada were $155 million in apples and $90 million in cherries, she said. Pears were not on the list in Canada.
From a record 2014 apple crop, Washington shipped 16 million boxes of apples to Mexico and 7.1 million to Canada, according to the Washington State Tree Fruit Association.
With a smaller crop this year, the volumes will be a more normal 9 million to 10 million boxes to Mexico and 4 million to 5 million boxes to Canada, said Todd Fryhover, president of the Washington Apple Commission in Wenatchee.
Meanwhile, Mexican allegations of U.S. apple dumping in Mexico are still pending and could result in tariffs, Powers said.