Unfair Mexican trade practices are undercutting Georgia farmers, driving prices below the cost of production and forcing some growers out of business, according to testimony given Thursday to federal trade representatives.
A dozen of the state’s farmers and elected officials said during a virtual hearing that Mexico is unfairly dumping low-priced produce, including berries, tomatoes, cucumbers and bell peppers, in the U.S. market. That’s making it all but impossible for American farmers – especially those in the Southeast – to compete, they said.
They urged the Trump administration to take action – or risk losing some American farms for good.
In “2018, the import pressure was so strong that we almost had to shut down,” said Tift County farmer Bill Brim. “We are barely holding on today.”
Chinese tariffs, low commodity prices and a once-in-a-lifetime storm, Hurricane Michael two years ago, have strained the balance sheets of Georgia farmers, creating a ripple effect across the state’s economy, where agriculture remains the No. 1 industry.
Mexico’s trade practices have been a problem for even longer, according to the region’s produce farmers.
The North American Free Trade Agreement opened the door for Mexican imports. The country’s warm climate, low labor costs and weaker regulations made its produce particularly competitive in the U.S.
Just as impactful was a subsidy program launched by the Mexican government in the mid-2000s, according to Charles Hall, executive director of the Georgia Fruit and Vegetable Growers Association.
Mexico began investing in greenhouses and other infrastructure to expand the country’s growing season, he said. In 2003, the country had 300 acres of subsidized fruit and vegetable acreage. By 2018, that had soared to nearly 130,000 acres, Hall testified, an increase of more than 43,000%.
Some of that Mexican produce has arrived in the U.S. at the precise times Georgia and Florida-grown crops are hitting the market, sending food prices plummeting.
“The pattern has shifted from Mexico undercutting our growers’ financial and competitive health to now threatening our industry’s very survival,” said Hall.
New protections sought
Southeastern produce growers sought extra help from the feds in the NAFTA replacement deal finalized last year.
Agriculture Secretary Sonny Perdue confirmed Thursday that the protections had been on the negotiating table until the very end, but eventually “became a red line in the sand for the Mexicans.” The final deal did not include the proposed changes.
Members of Georgia’s congressional delegation – who voted unanimously for the U.S.-Mexico-Canada trade agreement – and state agriculture officials have since pursued other forms of relief from the Trump administration.
Robert Lighthizer, the Trump administration’s top trade negotiator, previously agreed to begin documenting potentially unfair trade practices from Mexico and opened the door to requesting additional help from the International Trade Commission.
On Thursday, several Georgians suggested the Commerce Department use one of the biggest tools in its arsenal: launching a formal investigation into Mexico’s trade practices under Section 301 of the 1974 Trade Act, the same process President Donald Trump used against China in 2017.
Victor A. Arriaga, a spokesman for Mexico’s Ministry of Economy, said the country and its producers “have always complied” with its trade agreements with the U.S., as well as the rules set out by the World Trade Organization.
“Any protectionist measure granted to a small group of producers would jeopardize the benefits from agricultural trade across both sides of the border gained in more than two decades,” he said in a statement to The Atlanta Journal-Constitution Thursday.
“We have a long, friendly and successful history of working together and building strong and competitive agricultural industries,” said Arriaga, who noted that Mexico was the main international buyer of U.S. poultry, pork, dairy, corn and other commodities in 2019.
Balancing act
Several who testified Thursday cited a University of Georgia study that estimated the state could lose nearly $1 billion in annual economic output and more than 8,000 jobs “unless something occurs to slow down the increase in low-priced Mexican imports of blueberries and vegetables.”
“We cannot afford to sit back without the appropriate corrective action,” said U.S. Rep. Buddy Carter, R-Pooler.
Perdue, a former Georgia governor, said he was open to hearing out farmers but that officials had a tricky balance to strike between its trade priorities.
“We, as an administration, don’t want anyone preying upon our producers here, but honestly it gets into very much of a challenge for protectionism versus a very export-oriented country like the United States,” he said.
Georgia farmers who testified said if additional actions aren’t taken, the state’s economy will take a severe hit that will reverberate up and down the economy, from local restaurants and suppliers to local and state governments that take in their tax dollars.
“Without the American farmer, there is no economy in rural America,” said U.S. Rep. Austin Scott, R-Tifton.
Russ Goodman, a seventh-generation farmer in Homerville, framed the risk more existentially.
“In the wake of COVID-19, are we really going to risk becoming dependent upon other countries for our food supply?” he said. “I fear if nothing is done, we will do just that. ... And shame on us if we allow that to happen.”
