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Nogales: Optimism for USMCA

Arriving at the new trilateral agreement, the United States-Mexico-Canada Agreement, of course, was full of fits and starts and widely publicized.

While the treaty was finalized between the United States and Mexico in August, U.S. trade representative Robert Lighthizer applied pressure to Canada to join the new accord or be left out.

Bones of contention had less to do with produce than with lumber, steel, and dairy products.

During much of the summer, it looked to some as though the North American Free Trade Agreement might be replaced with three bilateral agreements: between the United States and Mexico, Mexico and Canada, and Canada and the United States.

Fortunately, this is not the case, and there is just one trade agreement, USMCA.

Rodrigo Diaz, marketing director at Diazteca Company, for one, is quite optimistic about trade with Mexico and its newly elected president.

“Andrés Manuel López Obrador is interested in social issues like education, medical care, social security, and improving small business.

“Partly due to the uncertainty of the NAFTA treaty and its replacement—whatever that was going to be—last year we exhibited at Fruit Logistica in Berlin and Hong Kong and at WorldFood Moscow. The alliance of our three countries is still the best trading partnership because even though we’ve opened up markets in the European Union and Asia, logistics are a big challenge,” Diaz said.

Alex Chamberlain, president of AC Tomato Sales, LLC, took a dim view of NAFTA and is glad to see it gone. In his opinion, “It’s killed many merchants in Nogales and the richest people left town. Everyone but the United States is doing well. I’d like to see some tariffs on Mexican produce.”

John Lichter, sales manager for Lisa, Inc., which specializes in pickling cucumbers, isn’t overly concerned.

“I don’t see USMCA creating a lot of changes in the way we do business. Before NAFTA, we used to pay a duty on vegetables coming into the United States. If we have to pay under the new agreement, we have to pay. Ultimately the added cost will fall to the consumer, which is unfortunate.

“Fifteen years ago, you could sell tomatoes at 25 cents per pound,” said Lichter. “Now, because of restrictions, tomatoes can’t go down much in price. We supply the consumer and if we can’t get the consumer to pay the price, they just won’t buy.”

Further he said, “Twenty to 30 years ago, the more growers grew, the more they made. With today’s technology, growers can be smaller and more efficient. As a perishable commodity, it’s better for prices to stay low so more people can consume more produce.”

This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full supplement.