WENATCHEE, Wash. — The apple industry does not see much to gain from changing the North American Free Trade Agreement.
About 30% of its crop goes to export, and Mexico and Canada are two major markets. Since its inception, NAFTA has been very good to apples.
“We can only go backwards,” said Todd Fryhover, president of the Washington Apple Commission. “We love status quo.”
Chuck Sinks, president of sales and marketing for Yakima-based Sage Fruit Co., echoed that sentiment.
“We’re just hoping it stays steady, and we’re just hoping that nothing gets changed too much,” Sinks said.
The first round of NAFTA negotiations began in August, the second took place in early September in Mexico, and two more rounds were scheduled for the fall.
The Northwest Horticultural Council, which handles government relations for tree fruit growers in the region, has been advocating for the maintenance of duty-free access to Mexico and Canada and for the preservation of trade remedy protections, said president Mark Powers.
“We don’t want to see it easier for the apple growers in Canada or Mexico to bring a dumping case against us, as they have in the past,” Powers said.
President Donald Trump has taken a skeptical tone on NAFTA and other trade agreements, and that attitude is a concerning one for the apple industry, with overseas markets so critical to its business.
“That part’s a little scary for us because we’re a big exporter,” said Bill Knight, domestic sales manager for Northern Fruit Co. “Over 50% of our fruit is headed out of the country, so we’re a little leery of that. It always seems that it might not affect the apples directly, but if something happens to whatever it is, whatever the product might be, there’s always a retaliatory effect.”
“It sort of affects the products that you are able to get into a certain country at a certain time, so there’s always the fallout from that,” Knight said.
Others also mentioned the possibility of retaliation, noting the conflict with Mexico about a decade ago over trucks being allowed into the U.S. without mileage restrictions. Mexico levied tariffs on numerous U.S. products, including apples and other fresh produce commodities.
Fryhover said apples have opportunities in a number of markets but that competition is increasing as other countries set up more agreements.
“I don’t think U.S. consumers realize that now basically the (European Union) has free access going into Japan — we don’t,” Fryhover said. “We’ve got a 20% tariff ... By us exiting out of (the Trans-Pacific Partnership), and throwing up, ‘Hey, we’ve got to make NAFTA better for us’ ... Those things create real problems for us.
“So all these other countries are not just sitting and waiting for the U.S. to figure it out. They’re moving ahead fast, real fast,” Fryhover said. “That’s a big deal.”
The apple industry is navigating a different export landscape than it was just a few years ago. Since Russia closed its doors, European apples that would have gone to Russia are now staying in Europe and being sold into other markets.
Accordingly, the U.S. ships nothing to Russia, little to Europe, and it faces more competition from European apples in other markets.
Without trade agreements, it can be hard for the industry to be competitive, Fryhover said.
“Not that Egypt is a big market today, but at one point they took half a million boxes of heavy-packed red 100s, and it was a huge market for us, and we were equal back then,” Fryhover said, noting that European and U.S. apples had faced the same tariffs. “But because of the (free trade agreement) between the EU and Egypt, they went to 20% and we stayed at 40%.”
Improvements can be made, Fryhover said, but waiting to take action on these issues can be costly.
“These other countries see opportunity and move a lot faster than we do, so I don’t think we’ll see any less opportunity as an exporting state,” Fryhover said, “but we’re going to see increased competition within those countries because of the (free trade agreements) they’re going to be negotiating with other countries.”