Page 39 - December2018
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n IMPLICATIONS OF THE “NEW” AGREEMENT
Goodbye NAFTA, welcome USMCA ... So where does that leave produce traders?
After more than a year of threats and negotiations, an initial trade agreement, titled the United States–Mexico–Canada Agreement (USMCA), is set to be the “new” NAFTA. Though much rhetoric has surrounded the agreement in the press, produce suppliers and marketers of Mexican product remain positive about the future. “There are still some unknowns regarding trade policies in North America, but so far there haven’t been any major negative changes on the Mexican fresh produce industry,” says Pedro Batiz, vice president of sales for Divine Flavor in Nogales, AZ.
Mexico will continue to play a crucial role in the future of the produce industry in the U.S., asserts Elvis Obregon, chief executive of Orbis Inno- vation in Produce in Pompano Beach, FL. “No matter how you feel about the political process, trade in fresh fruits and vegetables between the U.S. and Mexico will always move forward,” he says. “It is a symbiotic relationship that cannot be separated.”
Mexico, the U.S., and Canada have evolved together to become the largest economic block in the world, according to Allison Moore, vice president of Fresh Produce Association of the Amer- icas (FPAA) in Nogales, AZ. “Working together, the three countries are doing great things for consumers and busi- nesses,” she says. “The USMCA will continue to make our relationships in NorthAmericastronger,whichiswhata trade agreement should be doing for all of us.”
The new trade agreement isn’t much different from the old NAFTA with respect to produce, maintains Jerry Havel, director of sales and marketing for Fresh Farms in Nogales, AZ. “We don’t perceive anything the Administration has done will affect us negatively,” he says. “And, in truth, our business is really demand-driven. If there is a demand, they’ll figure out how to get to the market.”
Alberto Velazquez with Grupo Vet Y Agro (see page 41) in Michoacan,
Mexico, agrees business will be driven more by the market than from the trade agreement. “If consumption continues to increase, then demand increases, as well,” he says. “The consumer drives the demand, especially for tropical prod- ucts not really produced commercially in the U.S.”
And, for some Mexican growers such as garlic exporter Los Rancheros in Pabellón de Arteaga, Aguascalientes, Mexico, stricter U.S. trade protection could be favorable. “What affects us most is what China does with its garlic supply,” says Gerardo Narváez, sales. “When China ships to the U.S., it kills the market. If the U.S. levels the playing field with China, it could benefit us. We have an advantage in the market as long as
TOP PHOTO COURTESY OF CIRULI BROTHERS, BOTTOM LEFT PHOTO COURTESY OF ORBIS INNOVATION, BOTTOM LEFT PHOTO COURTESY OF FRESH FARMS
regulations and tariffs are equal for all.” Ultimately, the size of the U.S. market determines what will or will not be sold, statesJeralBautista,marketingmanager at Sabbsol y Mangos in Tapachula, Chiapas, Mexico. “The U.S. has more demand than it can fill, so it must look to other partners to satisfy consumers,”
he says.
Because of this increasing demand,
Mexico will continue to increase in its position as a supplier, adds Mike Melen- drez, produce manager with Food King Supermarket in Littlefield, TX. “We really need Mexico,” he says. “I wouldn’t want to see what the marketplace would be like without Mexico. Consumers would suffer. It would hurt the pockets of the American shopper.” pb
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