Free Trade Gets a Black Eye

By Stewart Truelsen

Don't speak about the benefits of free trade to Homestead, Fla. tomato grower Paul Dimare. He doesn't want to hear it. Instead, he will tell you what free trade has meant to him. "We've lost two-thirds of our production in the last few years and the hours that we are working in the packinghouse have gone from 10-12 hour days down to 2-5 hours a day."

Dimare and other Florida farmers saw the winter vegetable market clobbered by imports of Mexican tomatoes and peppers. According to Dimare, "We sold produce here from December in the state of Florida that was losing from $4,000 to $5,000 minimum an acre." Prices firmed up by the end of the season only because of a Florida freeze.

One needs to understand that tomatoes are the principal fresh vegetable imported from Mexico, so when the NAFTA agreement was implemented in January of 1994, Florida growers were less than enthusiastic. Tariffs were to be phased out over 10 years and mechanisms were believed to be in place that would guard against import surges.

What wasn't expected was the devaluation of the peso at the end of 1994. "When that happened we ended up having a 50 percent-off sale of goods coming in from Mexico," explains John Skorburg, a trade specialist with the American Farm Bureau. Skorburg says the problem is compounded by the fact that tomatoes are a perishable product. They can't be stored awaiting a better price.

Mexican tomatoes came into the U.S. at incredibly low prices and wiped out the market for Florida tomatoes. Dimare admits Mexican producers have lower labor costs, but he considers the huge surge in imports a dumping action. Dumping is defined by the Commerce Department as selling at less than fair value or at a price lower than the price for which it is sold in the home market.

In effect, Mexican farmers were saying, "Pay me anything so long as it is not in pesos."

The American Farm Bureau has joined Florida growers in petitioning the U.S. International Trade Commission for relief under a section of the Trade Act of 1974. Congress is also involved because the language of the act itself needs to be changed. Current law fails to take into account perishable crops with separate marketing seasons, like winter vegetables.

Unfortunately, the damage that has already taken place is described by Farm Bureau as "serious and perhaps permanent." Losses to Florida growers ran into the hundreds of millions of dollars over the last few years.

Free trade, or freer trade, is good for U.S. agriculture. Exports of farm commodities strengthen the farm economy as a whole. But free trade must also be fair trade. What has happened to Florida vegetable growers is not fair and it gives free trade a black eye.