Sun Sentinel Palm Beach Edition
NAFTA overhaul a disappointment
On the campaign trail in 2016, Donald Trump, presidential candidate, promised a total rewrite of the North American Free Trade Agreement, calling it the worst deal America ever made.
Today, President Trump is expected to sign a new trade agreement with Mexico and Canada at the G20 summit in Argentina, calling it an unqualified win for U.S. workers and consumers.
But whither Florida in this new agreement? Well, the state’s farmers — who have lost significant market share to their heavily subsidized Mexican counterparts — get to wither some more.
“If you’re talking about agriculture, it’s not a winner for Florida,” said J. Antonio Villamil, of The Washington Economics Group in Coral Gables, a veteran economist who served in the administration of President George H.W. Bush.
Sure, there are things to like in the newly branded United States-MexicoCanada-Agreement.
Besides the name change, the deal requires that 75 percent of auto content be made in North America for automobiles to qualify for duty-free treatment, according to the Center for Strategic and International Studies in Washington. That’s up from 62.5 percent under the old deal. And 40- to 45-percent must be made by workers earning at least $16 an hour.
Other provisions include the phaseout of a dispute settlement mechanism that lets investors sue NAFTA countries for discriminatory actions; the raising of the threshold at which imports from Canada and Mexico are subject to customs duties; and greater access to Canada’s heavily protected dairy, egg and poultry markets.
For Florida, the new agreement is “still better than no agreement” because vital supply chain relationships among Florida and Mexico and Canada would remain intact, Villamil said. “I’m breathing a sigh of relief ... at least no harm was done.”
But the status quo is little consolation to members of the Florida Fruit & Vegetable Association, who for 25 years have watched their businesses dry up as Mexican farmers dumped their governmentsubsidized produce here.
“We worked very hard to make known the damage that has occurred to Florida’s farmers as a result of NAFTA over the last two decades,” said spokeswoman Lisa Lochridge.
But their pleas to the president— amplified by Florida politicians and industry officials — have gone unheeded.
A key change sought was a better process for pressing dumping cases against our trade partners. Mexico in particular.
In testimony submitted last month to the U.S. International Trade Commission, association CEO Michael Stuart and president Michael Joyner noted that Florida’s output of strawberries has shrunk from 45 percent of the U.S. market in 2000 to 31 percent in 2017.
“The Mexican fruit and vegetable industry’s extraordinary gains at the expense of the Southeast industry have not been the result of ordinary market forces,” the executives said. “Those gains would never have occurred but for extensive Mexican subsidies that have supported virtually every dimension of Mexico’s skyrocketing fruit and vegetable production. They would likewise not have occurred had the Mexican industry not engaged in chronic unfair pricing, which has been fundamental to its growth strategy.
“When Mexico’s unfairly traded shipments have flooded the U.S. market over the last two decades, the Southeast producers have had no trade tools to relieve their unique seasonal circumstances,” they added.
Today’s deal does nothing to help them.
After initial details of a deal with Mexico were announced, Florida Sens. Marco Rubio and Bill Nelson introduced a bill designed to help growers bring trade cases against their Mexican counterparts. They wanted to make it possible for Florida farmers to start cases with the Department of Commerce and the U.S. International Trade Commission if they could prove dumping occurs seasonally, rather than yearround.
Rubio said the remedies were needed because there is no agreement with the Mexican government that covers “seasonal and perishable produce imports.”
As recently as October, a month before the midterm elections, Rubio and state Agriculture Commissioner Adam Putnam expressed concerns that Florida agricultural interests were not being addressed in the trade negotiations.
They were right, but nothing was done about it. The rebranded trade deal awaiting presidential signatures in Argentina makes no mention of Florida.
There’s still time to make it right.
If the deal is signed as expected, the president has 60 days to report the changes to Congress. Within 105 days of the signing, the U.S. International Trade Commission must conduct an economic impact study.
Then, Congress must pass legislation to implement the deal
There’s no time like the present for Florida’s Congressional delegation to emphatically hoist red flags on behalf of Florida farmers. If no favorable revisions are forthcoming, they’ll have only one alternative: unanimously vote ‘no’ on this very bad deal.