Valley farmers assessing the damage of Mexican tariffs

BROWNSVILLE — Rio Grande Valley farmers are concerned about an escalating trade dispute in the wake of new Mexican tariffs on a variety of U.S. agricultural products that went into effect Thursday.

"I thought we had NAFTA (North American Free Trade Agreement), but apparently Mexico doesn't think so," said Mike Martin, president of the Mission-based Rio Queen Citrus Inc. "I think we should have a similar tariff on their products if that's the way they're going to play it."

Rio Queen Citrus' operation produces grapefruit, honeydews, onions, oranges and tomatoes.

In its Texas operations, the business harvests nearly 1,200 acres of onions, making it the largest such operation in the region.

Although Martin said less than 3 percent of his onions are exported to Mexico, his business competes directly with Mexican onion imports, if only for a short period every year.

Mexico announced Wednesday that it would place tariffs of 10 to 45 percent on 89 U.S. exports, 36 agricultural and 53 industrial products.

The tariffs do not include food staples, such as corn, wheat, rice and beans; however, the items selected for tariffs appear to target the states of influential lawmakers.

Other items on the list include Christmas trees, pears, apricots, cherries, strawberries, dried fruit mixes, potatoes, peas, almonds, fruit and vegetable juices, prepared soups, wine and pet foods.

The economic impact to the United States is projected to be around $2.4 billion worth of imports in annual trade, the Mexican government reported.

However, some Valley agribusinesses expect a minimal economic impact and say it's the principle of the matter that's at stake.

At the heart of the controversy is the U.S. decision last week to end a controversial cross-border trucking program that gave a small number of Mexican trucks access to U.S. highways. Mexican trucks will continue operating inside a restricted 25-mile border zone.

The $2.4 billion amount is roughly equal to the amount of trade that Mexico expects to lose with the termination of the trucking program. Responding to the end of the program, Economy Minister Gerardo Ruiz Mateos said, "We consider this action to be wrong, protectionist and clearly in violation of the treaty."

Under NAFTA, certified Mexican trucks were supposed to have access to U.S. highways by 2000, but fierce opposition delayed the program until 2007.

The United States. ended funding for the short-lived program last week when it passed a $410 omnibus spending bill.

The U.S. Department of Agriculture and the Texas Department of Agriculture are still estimating the cost of the tariffs.

"All vehicles on Texas roads must meet federal safety standards, but Texas farmers should not have to pay the price for broken diplomatic relationships," said Texas Agriculture Commissioner Todd Staples.

Mexico is Texas' top trading partner and the second biggest buyer of U.S. exports.

"With Mexico representing the single largest buyer of Texas agricultural exports totaling $3.1 billion last year, it is critical this trade dispute is resolved~immediately," Staples said.

Despite criticism from many U.S. officials, U.S. Rep. Solomon Ortiz, D-Corpus Christi, said he sees the action as mostly symbolic.

"I think what (Mexico) is trying to do now is focus on (congressional) members who are against Mexican trucks coming in to the U.S.," Ortiz said. "I don't think its going to have a big impact on Texas, but you never know. It's only the first day."

Mexico's decision to target agriculture is a widely used tactic for achieving results, according to Ed Gresser, director of the Trade and Global Markets Project.

"Agriculture is a favorite target for trade retaliation," Gresser said. "Farmers are typically very powerful and when they get angry the government listens."

Ultimately, Mexico is counting on the influence of the agriculture lobby to get what it wants on the cross-border trucking program.

And the early indication is that the strategy is working.

Curtis DeBerry, president of the Weslaco-based Progreso Produce, LTD., said he plans to travel to Mexico next week to meet with government officials and agribusiness.

If the agriculture industry on both sides of the border can present a united front, he said, they could force the opposing governments to end their standoff.

"I think you'll see the U.S. and Mexican governments come to some kind of resolution, but it's going to take time." DeBerry said. "Right now we have two sides saying it's my way or the highway. I think everyone knows that's going nowhere."

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Aaron Nelsen is a reporter for The Brownsville Herald.