Why should fresh produce commodities be subject to antidumping laws? Does it makes sense to require that foreign suppliers of fresh produce commodities to the U.S. adhere to dumping definitions crafted for ball bearings and widgets?
In particular, why shouldn’t members of the North American Free Trade Agreement enjoy free movement of fresh produce within the trading area? My thought on the topic is fairly primitive and my knowledge of U.S. trade law far from exhaustive, but I question the value of antidumping actions against fellow members of the free trading bloc. After all, isn’t the design of “free trade” to allow regions to benefit from comparative advantage? Washington state can grow better apples than anyplace in Mexico - sorry! Doesn’t each trade action benefit lawyers and lobbyists more than help growers and consumers?
I asked a question to the Fresh Produce Discussion Group about this topic.
“If you were to rewrite the North American Free Trade Agreement now, would you still allow anti-dumping actions between members of the trading bloc? Why or why not?”
Find the question here.
Industry veteran John Pandol responded this way:
“In cases where one can prove that an industry or foreign government is following a policy of targeting a market by constantly selling below costs for sustained periods of time, for purposes of utilizing excess productive capacity or to undermine the production in the target country, I would allow it. That being said, it is not illegal in the US to sell below cost(I am unfamiliar with the other 2 NAFTA signatories), so why should foreign suppliers be penalized and American sellers not? In the case of perishable produce, I don’t know before harvest what my cost is, what my sales price will be or even IF I can sell the products. IF you were to restate your question, should products covered under the PACA be subject to anti-dumping statues, I would absolutely say no.”
I have to say John makes sense. What do others industry leaders think? Are antidumping laws still needed for fresh produce?