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NAFTA Nuances

Uncertainty about free trade agreement leaves agricultural industry worried about future

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Growing stuff to feed hungry people has always been big business. The latest figures in Arizona, released just last week at the annual Arizona Farm Bureau meeting in Mesa, show the economic contribution of agribusiness in the Grand Canyon state has reached a record $23.3 billion—a 25 percent increase over the last five years and a 60 percent jump over the last 15 years.

We grow a lot, enough to allow us to export some crops (especially the leafy green varieties from Yuma and Maricopa counties), and we import a godly amount from our NAFTA trading partners.

When you've been representing the fruit and vegetable industry in Southern Arizona for nearly half a century and generate close to $50 million in state and local tax revenue, you should have a pulse on what's happening. But this year, with the renegotiation of NAFTA still up in the air, even the Fresh Produce Association of the Americas is waiting for the other shoe to drop.

"It's an uncertainty," said FPAA Executive Director Lance Jungmeyer at last week's 49th annual convention in Tubac, attended by 100 association members. After four rounds of renegotiation without any perceptible positive progress, the needle still hasn't moved much.

"There was an ambitious goal to have it all wrapped up by the end of this year, but most people recognized that would be a bit of a stretch," he said. "Now, the new target date appears to be March of 2018—and even that may be overly ambitious.

He added that by that time, Mexico will be thinking about its own presidential elections, and the U.S. will be talking about mid-terms.

"It's likely both countries would step back from the negotiating table and say let's take a break and let some politics happen," he said. "Unfortunately, when politics intrude, as is happening now, sometimes bad policies result and that's why we're where we are currently."

During the group's recent gathering, a panel of U.S., Mexican and Canadian representatives from the produce industry discussed what they'd like to see in any revamped trade agreement.

They likened the 23-year-old trade agreement between the three countries to a 25-year marriage, a polygamous one mind you, but a union none-the-less that had endured, basically on cruise control with only a few speed bumps.

As one of the NAFTA panelists, Veronica Nigh of the American Farm Bureau Federation, put it: "How many people who have been married for nearly a quarter of a century wouldn't seek to improve their relationship if they had the opportunity? We didn't ask for this renegotiation, but now that we're here, we should explore options to see if there are ways we can improve the agreement."

With statistics showing that over the lifetime of the current agreement, volume of agricultural trade has increased six-fold between the U.S., Mexico, and Canada, Nigh noted that the United States was the largest fruit importing country in the world, citing one growth example: Pre-NAFTA, our average per capita consumption of avocados was 1.5 pounds annually. Today, that consumption figure has grown to 7 pounds.

Using other graphs to illustrate that half of U.S. imports involved a handful of favorite commodities like tomatoes, peppers and cucumbers, and that domestic production of those vegetables was declining while comparable Mexican import figures continued to rise, her subtle statement was: Despite our efforts, at this point, our message has not yet reached the administration that trade really is a beneficial process.

"Does free trade work? You bet it does, but like the marriage contract referenced earlier, it requires give-and-take and cooperation of all parties," said panelist Ron Le Maire, president of the Produce Marketing Association of Canada. "The number one priority of our industry is to maintain tariff-free trade across all three NAFTA countries. NAFTA 2.0 is an opportunity for us to modernize and strengthen this vital trading relationship and we're hopeful an agreement can be reached that will benefit North Americans for generations to come."

Growers and ranchers on both sides of the U.S.-Mexico border have been working cooperatively for years to solve mutual problems, according to attendee Steve Le Fevre, vice president of business development for Wholesome Family Farms Inc. in Nogales.

"We, as a company (Wholesome Harvest), need to know what's going to happen so we can formulate a plan of action if anything changes," he said. "I remain optimistic about the outcome. It's hard for me to believe they're going to take this NAFTA deal and just kill it. There's a lot of heated discussion, but I think some cooler heads will prevail and they'll figure out how to keep NAFTA going."

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