(Jan. 13) To many, NAFTA is the dirtiest five-letter word. It’s brought in a flood of inexpensive product, ruining a long history of profitable business for domestic producers. In fact, producers are going out of business faster than ever, unable to get credit to help plant next year’s crop, which probably wouldn’t find decent markets anyway.
Just ask practically anyone on any side of any border between the U.S., Mexico and Canada. That will be their answer, regardless of their nationality.
But the North American Free Trade Agreement has not produced just losers. In fact, the winners are many. Consumers are the obvious benefactors, seeing lower prices and increased availability of many products.
The value of U.S. produce exports to Mexico (including fresh and frozen) has doubled since 1997, reaching $348 million in 2001.
Still, it’s easier to argue that — from the produce industry perspective — Mexico has been the bigger winner, since its produce exports to the U.S. grew by more than $660 million in the same time period. And despite the fact Mexico sold $2.4 billion in produce to the U.S. in 2001, some interests there want to scuttle the agreement, according to wire services.
Mexico’s economic secretary calls the treaty flawed and assures his people that “what needs to be corrected will be corrected.” Mexico’s foreign secretary, while ruling out a renegotiation, alleges that U.S. agriculture subsidies “break the rules of fair play.”
What has Mexico most worried is the heavily subsidized U.S. grain industry, which they fear will put small farmers out of business.
The fact that many U.S. products became duty free Jan. 1 also has a little to do with their fear.
But, really, all producers on all sides of NAFTA need to realize that the agreement is here to stay, and may become the model for many future trade deals.
With that in mind, here are a few resolutions for the New Year and NAFTA participants:
- Don’t put up phony phytosanitary barriers. They only cause retaliation, often upon other, unrelated industries.
- Approach anti-dumping complaints with utmost caution. They, too, lead to retaliation, not to mention expensive litigation.
- Establish trinational groups to help avoid conflicts. The North American Tomato Trade Working Group is one such example, serving as a forum on macro-issues affecting tomato producers. On the micro-issue side, the Dispute Resolution Corp. seeks to minimize disputes between individual companies.
- Finally, if you can’t lick ’em, join ’em. If you’re in position to profit by cooperating with a producer in another country, even while your domestic business suffers, pursue the profit. That’s why you’re in business.
If industry groups approach the New Year in such a spirit, eventually, hopefully, NAFTA will be mentioned along with another five-letter word — money.