The Commerce Department (DOC) stated that it will investigate agricultural subsidies in fruits and vegetables from Mexico, along with the productive sector of the United States.
The DOC “will continue its ongoing efforts to partner with the US industry in identifying unfair subsidies provided by foreign governments, including Mexico,” as part of a plan announced Tuesday that includes safeguard investigations on blueberries and potentially on strawberries. and Bell peppers.
“This information would contribute to and feed into the Commerce Department’s ongoing efforts to monitor and address foreign subsidies that may contribute to damage to domestic industries in the United States,” the DOC added.
According to the US government, US perishable fruit and vegetable producers face unique challenges due to the short period of time during which their products retain the freshness demanded by retailers and consumers.
Given this narrow window, the profitability of US fruit and vegetable producers can be devastated when imports of a product increase immediately before or during the domestic producers’ marketing window for that product.
This challenge is compounded when imported products are sold to the consumer at lower prices than domestically grown products, and particularly if import prices are significantly and artificially lower due to unfair trade practices.
Additionally, while various regions of the United States may be suitable for growing a particular product, the disparate climates and temperature patterns between those regions create distinct marketing windows for each region that vary from one another.
As such, different regions within the United States that grow the same seasonal product can be affected and potentially damaged by competition from imports to drastically different degrees.
Also, from the perspective of the US government, the various regions may differ with respect to the submarkets in which they primarily market their products.
For example, blueberry growers in Florida and Georgia may have to compete primarily against imports from a particular country in that region’s marketing window, Michigan blueberry growers against a different country in their window, while blueberry growers in their window Blueberry growers in Northwest Washington and Oregon may face entirely different competitive dynamics.
Given the unparalleled variety of seasonal specialty crops grown in the United States, the different marketing windows between regions growing those crops, and the variability of import competition for each crop, there are contrasting views on this issue that vary by crop. cultivation and largely according to the region of the country.
In general, it is predominantly fruit and vegetable growers in the southeastern states of the United States who say they are adversely affected by competition from imports from Mexico, while growers and stakeholders in California and western states they generally consider that foreign production is counter-cyclical and beneficially complementary to domestic production in their country.
The dramatic increase in US imports of fresh fruits and vegetables from Mexico since the entry into force of NAFTA is undeniable.
According to the DOC, in 1993, the United States imported approximately $ 1.2 billion of fresh fruits and vegetables from Mexico.
By 2019, imports had increased 1,025%, to $ 13.5 billion.
The Office of the United States Trade Representative (USTR), the United States Department of Agriculture (USDA), and DOC jointly prepared a report outlining the Trump Administration’s plan to address the threats that increased imports pose to US producers of seasonal and perishable fruits and vegetables.
The USTR, DOC, and USDA held hearings on August 13 and 20. Following those hearings, the USTR, DOC, and USDA jointly prepared the report.
In particular, DOC will establish an outreach program to connect with southeastern growers and other producers of seasonal and perishable fruits and vegetables to improve understanding of applicable trade remedy laws and processes.
The DOC will also establish a formal channel for interested parties to provide information related to “unfair subsidies” from foreign producers and exporters of perishable and seasonal fruits and vegetables, including those in Mexico, “based on continued efforts to partner with the US industry to identify such subsidies ”.