March 21, 1998 in Nation/World

U.S., Mexico Resolve Apple Feud Deal Revokes Punitive Tariff, But Imposes Price Floor

Scott Sonner Associated Press
 

U.S. apple industry officials reached an agreement with Mexico Friday to resume shipments south of the border without a huge import fee, but with a price floor the U.S. industry opposes.

Mexico agreed to drop the 101 percent tariff that had effectively shut down U.S. apple trade there, as long as the U.S. industry agrees to a price floor that will make Mexican-grown apples more competitive, an industry spokesman said.

“The good news is this agreement immediately restores our access to our industry’s No. 1 export market,” said Kraig Naasz, vice president of the Northwest Horticultural Council, based in Yakima.

“The bad news is it precludes our ability to offer Mexico’s consumers the full range of products we produce and potentially provides our competitors around the world with an opportunity to undercut our prices,” Naasz said in a telephone interview from a flight out of Mexico City.

The five-year agreement requires U.S. apple exporters to set a minimum price of $13.72 per 42-pound carton of apples sold in Mexico, Naasz said.

That represents the average price sold there over the past three years. About half of the U.S. apples sold there over that period were priced below that, and those smaller, lower grade apples likely will continue to be kept out of Mexico as a result of the deal, Naasz said.

U.S. industry officials signed the deal with Mexican government trade officials early Friday after “four days of literally around the clock negotiations,” Naasz said.

Mexico, the No. 1 U.S. apple export market at an estimated $100 million in sales last year, launched an anti-dumping investigation last March and levied the 101 percent fee on U.S. apples Sept. 1.

Washington state, with 95 percent of the business, Oregon and Idaho currently are licensed to export apples to Mexico, but the trade has all but stopped as a result of the fee, which effectively doubles the price of the apples.

“Hopefully this settlement will allow the industry to recoup some of the devastating losses incurred because of Mexico’s protectionist behavior,” said Sen. Patty Murray, D-Wash.

“At the agreed price our industry can be competitive and profitable,” Murray said.


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