USMCA losses to Georgia growers could reach about $900 million: report

Farm laborers work at a tomato field in Los Pinos, San Quintin Valley, Baja California State, Mexico on April 23, 2015.

ALFREDO ESTRELLA | AFP | Getty Images

Unless the proposed U.S. Mexico Canada Agreement (USMCA) is actually changed, the item could “cause extensive economic damage to Georgia” in addition to also its fresh produce industry, according to economists at the University of Georgia.

“While the deal may be an overall positive for the United States, the item exposes U.S. fruit in addition to also vegetable growers to a high risk of substantial harm through unfair competition via Mexican imports,” the report said.

The report projected annual economic losses to Georgia’s tiny fruit in addition to also vegetable industry under USMCA could be $340 million to nearly $900 million. the item also said there could be job losses of about 3,300 to more than 8,0 under the proposed replacement to the 25-year-old North American Free Trade Agreement.

According to the report, Georgia’s blueberries usually have a market presence in Northern states ahead of local producers due to climate advantage. Similarly, the item said Georgia’s climate is actually ideal to grow fall vegetables such as tomatoes, peppers, squash, cucumbers, in addition to also eggplant.

However, the UGA report dated April 22 said Mexico has ramped up production of fresh produce in recent years in addition to also today “their imports compete directly with Georgia fruits in addition to also vegetables. Georgia’s natural seasonal advantage has been diminished by Mexican imports arriving during Georgia’s selling season at prices well below Georgia’s production costs.”

U.S. Secretary of Agriculture Sonny Perdue was not available for comment. Perdue is actually a former governor of Georgia in addition to also agribusinessman. 

Sonny Perdue, U.S. secretary of agriculture

Al Drago | Bloomberg | Getty Images

although he recently defended the Trump administration deal. 

“Not only does USMCA expand market access for commodities in addition to also crops, although also the agreement specifically addresses agricultural biotechnology, including brand new technologies such as gene editing, to support innovation in addition to also reduce trade-distorting policies,” Perdue wrote in a guest column This specific week from the Gazette paper in Cedar Rapids, Iowa.

Added Perdue, “USMCA ensures a level playing field for American agriculture. If we are to keep our economy booming in addition to also continue to feed in addition to also clothe the earth, Congress must pass USMCA.”

Some agricultural producers want adjustments to the deal first. They claim Mexico is actually “dumping” seasonal produce on the U.S. market with the help of government subsidies. Last month, a group of U.S. lawmakers via Florida in addition to also Georgia wrote a letter to U.S. Trade Representative Robert Lighthizer expressing concern about the lack of trade protections for seasonal in addition to also perishable produce from the proposed USMCA. 

Florida tomato growers in addition to also a group of U.S. lawmakers have previously accused Mexico of unfair trade practices. Southeast growers argued that will an anti-dumping clause in a brand new trade deal might give U.S. farmers more leverage to hold Mexico accountable for not playing by the rules.

although producer groups in California in addition to also additional U.S. Western states cautioned against including anti-dumping provisions in a NAFTA replacement. They warned the item could be used by Canada or Mexico to make a “dumping” case against U.S.-grown seasonal crops such as apples.

The U.S. Trade Representative’s Office referred inquiries to the Commerce Department, which didn’t respond to a request for comment.

The UGA study also criticized Mexico’s government subsidies to its agriculture industry in addition to also added that will Mexico’s labor costs can be about one-tenth of U.S. labor costs. The report claimed, “the costs of the Mexican imports is actually often less than one half the cost American growers were receiving before the Mexican imports arrived.”

The UGA report said there’s potential for “catastrophic damage” when the item comes to tomatoes.

In February, the Trump administration indicated the item planned to reopen an anti-dumping investigation into Mexican tomatoes in addition to also exit a 2013 agreement that will has been criticized by U.S. growers. The 2013 agreement was described on a Commerce website as a commitment by Mexican producers in addition to also exporters to sell tomatoes “at or above the reference cost, which will eliminate completely the injurious effects of exports of fresh tomatoes to the United States.”

On Tuesday, Reuters reported the U.S. plans to impose a 17.5% tariff on Mexican tomatoes This specific week, coming after the two countries failed to renew the 2013 agreement. the item cited Mexican officials as the source for report.

“As of tomorrow, a tariff of 17.5% will be applied on the value of the product … Mexican exporters will be affected, the item’s going to affect their financial flows although that will is actually going to be directly transferred to U.S. consumers,” Mexican Deputy Economy Minister Luz Maria de la Mora was quoted as saying.

She added, “We’re very disappointed although the Great news is actually that will negotiations continue, looking for a solution. in addition to also we trust that will from the coming weeks we can, in fact, reach an agreement.”