In Our View: The Bite Is off Apples
Binational deal frees fruit from tariffs, but at what cost? We’re not sure
Tuesday, July 12, 2011
If it’s good news for Washington farmers, then it’s probably good news for most Washingtonians. And the recent break in an impasse over Mexican tariffs definitely is good news for farmers in this part of the country.
That doesn’t, however, mean that it’s good news for everybody.
Here’s a quick history of the dispute, one that led to 20 percent tariffs on American apples delivered to Mexico:
• Since 1994, the United States had refused to honor a provision of the North American Free Trade Agreement that would allow trucks from Mexico to carry cargo across the border to their final destination. Instead, the federal government imposed a 25-mile restriction on Mexican trucks.
• In retaliation, the government of Mexico in 2009 imposed tariffs on a variety of American goods and agricultural produce. It adjusted those tariffs in 2010 — for example, adding apples to the list with a 20 percent tariff. At the same time, it reduced the tariff on potatoes from 20 percent to 5 percent.
• On Wednesday, Ray LaHood, U.S. Department of Transportation Secretary, signed an agreement with his Mexican counterpart to bring an end to the stalemate, allowing trucks delivering goods from Mexico to travel to their final destination. Punitive tariffs on American products were scheduled to be cut in half within 10 days of the agreement, and they were scheduled to be eliminated once Mexican trucking firms are approved for service within the United States.
“This is good news,” Washington Agriculture Director Dan Newhouse told the Tri-City Herald. “From our perspective, it felt like we were being almost unfairly punished. It had a pretty detrimental effect on our exports to Mexico.”
Washington farmers rely heavily upon markets in Mexico. According to information sent out from Sen. Maria Cantwell, D-Wash., state agricultural exports have dropped by at least $82 million since the tariffs were imposed.
But while Cantwell, fellow Democratic Sen. Patty Murray, and Republican U.S. Rep. Doc Hastings have pushed for an end to the tariffs, the news is not cause for celebration from all Washingtonians.
Groups representing truckers fear that the deal will generate increased competition, and they ask why the White House made no public announcement about the signing of the agreement.
“So much for their supposed transparency,” Jim Johnston, president of the Owner-Operator Independent Drivers Association, told the Herald. “Seems like the administration is dead set on caving to Mexico’s shakedown regardless of the cost to the American public and our tax coffers.”
In addition, trucking organizations within the United States are asking whether the agreement includes adequate safety and inspection provisions for trucks entering the country. This is a legitimate concern, and it raises the question of why the public and Congress were not provided with information about the agreement before it was signed. Improved transparency on the part of the administration — an administration that campaigned on a platform of transparency — should be demanded in order to answer those questions.
As with most issues regarding international trade, there are various conflicting concerns that must be taken into account. But in the end, the agreement is a move toward free markets, and in the end that will benefit producers and consumers on both sides of the border. The crux is that Washington farmers were caught in the middle of a dispute that was not of their own making.
As Murray said: “Now that the agreement is signed, there is no reason why farmers and growers in my home state of Washington should have to wait any longer. They have nothing to do with this dispute, and it is deeply unfair that they continue to be punished for it.”