(Nov. 8) With Florida’s agriculture leaders balking and Brazil’s new leader expressing open opposition to President Bush’s vision of a Free Trade Area of the Americas, the probability of finishing negotiations by its stated deadline of 2005 is far from certain.

That’s isn’t stopping U.S. Rep. Adam Putnam, R-Fla., from giving U.S. Trade Representative Robert Zoellick an economic argument to leave orange juice tariffs alone in upcoming negotiations.

Putnam hosted a meeting of Florida agricultural industry leaders and Zoellick in mid-October.

He said the argument of Florida’s citrus industry relative to the FTAA is simple: Don’t negotiate away the tariff on orange juice to Brazil.

“The citrus industry can’t survive without the tariffs,” Putnam said. Removing the orange juice tariffs, which are 27 cents per pound solids or about 8 cents per liter, would eventually lead to a monopoly on the world’s processed citrus output by Brazil’s processors, he said.

“To the degree we eliminate a tariff and create a situation where a few large (Brazilian) producers have unfettered access to the U.S. market, it could put the industry out of business,” added Mike Stuart, president of the Orlando-based Florida Fruit & Vegetable Association.

Putnam said Florida’s fresh growers and packers are dependent on a healthy processing industry. Processing accounts for 96% of Florida’s citrus output, he said.

Florida and Brazil together account for about 87% of processed citrus output, he said. Without a U.S. tariff to protect Florida’s domestic market, Putnam said Brazil’s five major processing firms will gain control, eventually reaching a cartel-like scenario.

The United Nations Foreign Agricultural Organization estimated that Brazil accounted for 30% of world orange production in 1999, compared with 15% in Florida. U.S. exports of orange juice during the first nine months of 2001 were 356,940 metric tons, about half the level of Brazil’s exports.


Meanwhile, the U.S. and 33 other countries sent their trade ministers to a Nov. 1 FTAA session in Quito, Ecuador.

Mary Kay Thatcher, director of public policy for the American Farm Bureau Federation, Washington, D.C., attended the WTO ministerial meeting in Quito. She said other countries at the talks criticized the U.S. for refusing to put its domestic support to agriculture on the bargaining table for FTAA.

Brazil has indicated it doesn’t want to give on its own tariffs unless the U.S. addresses domestic subsidies to agriculture. The U.S. position, reiterated at Quito, is that domestic support to agriculture is on the table at World Trade Organization talks. The U.S. negotiating teams argued that it would lose any leverage at the WTO talks if it negotiated away agricultural supports at the FTAA.


Thatcher said the farm bureau prefers that the U.S. would negotiate the WTO round first and then revisit the FTAA. Countries have until Feb. 15 to put forward bilateral tariff reduction proposals with other countries. She said it is “very iffy” to get the FTAA done by 2005.

“The most difficult tariffs are sugar and orange juice,” she said, noting that both U.S. sugar and orange producers feel threatened by open access for Latin American exporters.

Negotiating guidelines call for immediate tariff eliminations on a majority of products, but also leave room for sensitive commodities that can have tariffs phased out over a 10-year period.

Given the recent election of left-leaning Luiz Inacio Lula da Silva as the president of Brazil — and the general economic turmoil in Latin America — Putnam said it remained to be seen if deadlines set can be met. Lula da Silva has expressed opposition to the FTAA but pushed for greater access for Brazilian orange juice to the U.S. market.

Brazil, because of its population and economic power, is the linchpin of any Latin American trade agreement.

Besides the election in Brazil, Putnam said currency and unemployment turmoil in South America add to the questions about the prospects of the FTAA.

Kam Quarles, Washington, D.C.-based government affairs director for Sunkist Growers Inc., Sherman Oaks, Calif., said Sunkist has concerns about the FTAA and other trade deals. He noted that initiatives from the administration, including FTAA, irradiation treatment of imports and modification of cold treatment, tend to suggest an eagerness to open doors for imports.

It can’t be a one-way agenda to liberalize the U.S. market, without the reciprocal victories in foreign markets that America needs to survive, he said.