Help Sought In Mexico Apple Fight Northwest Lawmakers Seek Assistance From Clinton Administration

The Northwest congressional delegation wants the Clinton administration to settle a budding trade dispute.

The issue is Mexico’s steep new duties on American apples.

The 101 percent duty, imposed Sept. 1, effectively slammed the door on the biggest export market for Red and Golden Delicious apples, said Kraig Naasz, vice president of the Northwest Horticulture Council, a lobbyist for the tree-fruit industry. Those varieties make up 98 percent of U.S. apple exports to Mexico.

In 1996, apple exports to Mexico totaled 3.7 million 42-pound cartons, down from 4 million in 1995 and less than half the 8 million cartons exported in 1994.

With the new duty, U.S. apples now cost more than twice what Mexican-grown apples cost. Industry representatives say U.S. apples now have little chance to sell south of the border, and shipments have virtually stopped, Naasz said.

The duty knocks Washington apples - the vast majority of those exported - out of a lucrative market which generated more than $40 million last year.

The new duties - technically open to comment for 120 days - also appear to violate the North American Free Trade Agreement, industry representatives said.

Sen. Slade Gorton, R-Wash., said Thursday that the dispute could erode support for President Clinton’s plans to expand NAFTA.

Gorton, Sen. Patty Murray, D-Wash., and Rep. Doc Hastings, R-Wash., said at a news conference they take Mexico’s action seriously. Murray was extremely disappointed in the Mexican government for “a political and protectionist action.”

Hastings and other Northwest House members met this week with Peter Scher of the U.S. Trade Representative’s office, and later announced a commitment from that office to help resolve the issue.

The Mexican government announced the hefty tax after an “anti-dumping” investigation by Mexico reportedly found that American apples were being sold at below-market prices.

U.S. industry representatives disagreed and asked the trade office and the Commerce and Agriculture departments for a review.

Under NAFTA, the next step will be for representatives from these agencies to meet with Mexico’s Ministry of Commerce and Industry.

If an agreement cannot be reached, the case would be heard by a NAFTA tribunal of appointees from each country. That could tie up the issue for months, according to a U.S. trade official. Just setting up the tribunal can take more than six months, which would shut out Washington growers from their busiest export season, which begins in January.

Everyone from trade officials to the apple growers hope to settle the dispute without need for a tribunal.

If the dispute is settled soon, some Washington growers will continue to greet the tax hike with a shrug.

If it had to happen, said grower Kyle Mathison, part-owner of Wenatchee-based Stemilt, it came at the best possible time because the apple inventory is low.

Now it’s relatively easy to divert produce slated for Mexico to other markets, such as Hong Kong and Taiwan. The dispute has had little effect on Mathison’s business so far.

If the dispute drags on, Stemilt - which had more than $110 million in revenues last year, the majority from its fruit shipping business - “is going to hurt,” Mathison said.

“I certainly hope it’s cleared up by the first of the year,” he said.

, DataTimes