Good Fruit Grower / March-15th 2006 /  In My View

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In My View

Trade and tree fruit profits

Worry dogs every step in the cycle of producing a fruit crop. Killer frosts, drought, hail, pest infestations, unexpected expenses, and securing enough workers for harvest. And then comes winter. Will the fruit in the bin return enough money to convince a skeptical banker to agree to finance the family’s orchard for yet another year?

International trade policy may seem far removed from these unrelenting daily trials. But it is directly related to the last question—will this crop bring a profit?

Each year, the Pacific Northwest exports about one-third of its apples, pears, and fresh cherries. These shipments represent a large percentage of all U.S. exports of the three crops, and, in the case of our apples, over 90 percent of the national total.

Since the Great Depression, the United States has led the effort at opening the world’s trade system by way of reducing or eliminating tariffs and quotas. This policy has brought great benefits to the U.S. economy, helped advance our political and defense objectives, and aided those who suffer in less advanced areas of the globe. While bipartisan support is fraying, the United States is still firmly set on a free trade policy course.

The chances of simply shutting America’s market to fruit from Chile, South Africa, Canada, or other such competitors are close to nil. Meanwhile, quotas do not exist, and tariffs are at or near zero for imported apples, pears, and cherries.

We are in a world market. By necessity, trade policy work for our industry consists of protecting our production areas from imports that might introduce pests or diseases of quarantine concern. It involves defending against—or initiating—economic trade cases, such as antidumping. It means working with our government to bring down tariffs and other such barriers erected by foreign governments to protect domestic producers.

Our industry must make its views and priorities known when the administration requests advice through such general vehicles as the Federal Register or specific committees like the Agricultural Policy Advisory Committee for Trade in Fruits and Vegetables. Similar responses are necessary whenever a member or committee of Congress desires information on our trade views related to, say, a proposed new free trade agreement. Most importantly, we must initiate action to get the proper share of our government’s finite resources devoted to improving market access for our crops.

Competition

Our competitors for attention in this policy arena are not foreign producers. They are your fellow agricultural producers, whether of beef or citrus or soybeans. When we need a USDA technical expert to travel to Taipei, will our issue capture the immediate attention of that official if he is also charged with solving an avian flu problem—and when U.S. poultry exports to Taiwan dwarf apple exports in terms of dollar value? If we want the U.S. Trade Representative to write a strong letter to his counterpart in the People’s Republic of China about a pear issue, will he do so if he is also trying to resolve a soybean problem to reopen what has become the largest export market for the U.S. soybean producers, to the tune of $2.5 billion dollars?

Politics, whether of the international trade variety or that at the level of county commissioners, is the art of the possible.

Some have advocated we just shut down all imports from Mexico pending a reasonable outcome of its long-standing antidumping case against our shippers of Red and Golden Delicious apples. Or, immediately repeal the North America Free Trade Agreement. Neither will happen. First, trade rules binding on the United States do not allow for such action. Second, NAFTA is solidly a part of U.S. geostrategic policy toward an extremely important neighbor. It will not be repealed, absent a major political upheaval. Third, other U.S. exporters— with more political power and greater commercial interests at stake— would object to either course, fearing immediate retaliation by Mexico. Fourth, even with the misguided antidumping case, Mexico continues to be the largest export market for our apples. While frustrating, we must continue to work through the legal process governing this situation. Politics, again, being the art of the possible.

Successes

There are small but significant victories. With last year’s passage of the Central America Free Trade Agreement, tariffs against our fruit in Central America are set to come down to zero as this free trade agreement is implemented. Technical issues were addressed in Taiwan, and this important market was reopened. The World Trade Organization ruled on the side of the United States in a phytosanitary case against Japan involving fireblight and our apples. Inspection rules in the European Union were modified to help the entry of our fruit shipments to the United Kingdom. And many more examples exist.

The United States contains 298 million people; the world, 6.5 billion. Our population is 4 percent of the world’s. If our industry’s marketers are to be successful in selling a seemingly ever-increasing volume of fruit, where are the best opportunities? While gains certainly can still be made in our domestic market, destinations beyond our borders—where 96 percent of the world’s population resides— must be the primary target for new sales. It follows that we must continue to devote reasonable attention to international trade policy work, with the ultimate aim of making it ever more possible for this industry’s apples, pears, and cherries to be sold at a profit.

And only the real potential of profits will ensure refinancing for as many of our orchardists as possible — thereby allowing for the start of yet another production cycle with the emergence of the hopeful blossoms of spring.