Baked within the U.S.-Mexico-Canada Agreement (USMCA) is a July 1, 2026, date for a joint review. As this deadline arrives, the U.S. has signaled a potential shift toward bilateral agreements, sparking concern over the future of the trade pact.
Dante Galeazzi, president and CEO of the Texas International Produce Association, joined “The Packer Podcast” to share the unique position Texas plays and the benefits of USMCA to the state.
The Trillion-Dollar Corridor
Galeazzi says New Mexico, Arizona, California and Texas have all been big beneficiaries of the nearly 30-plus years of free trade between the countries with USMCA as well as NAFTA. He estimates the economic benefit in the trillions. Galeazzi says the Tex-Mex corridor has developed infrastructure, expertise and a bilingual workforce over the last 30-plus years to support free trade.
“We’re moving more than 22 million lb. of fresh produce every single day through Texas, and that’s going to the U.S. and Canada,” he says. “Our region has really benefited being central in the North American block.”
Galeazzi says large free trade agreements like the USMCA provide the certainty necessary for companies to make massive financial commitments. He says that without free trade, production, planning and jobs are at risk.
“You got to think about long-term investment,” he says. “At this point, companies are investing millions and billions of dollars … and if they don’t have surety in what trade is going to look like in the future, they may not be investing those millions or billions of dollars, and their investments look much smaller. Which in turns means production is smaller, planning is smaller and job needs are smaller.”
The Danger of ‘Tit for Tat’ Protectionism
Galeazzi says the current protectionist stances both the Canadian and U.S. governments have taken into the USMCA negotiation period perhaps could be negotiation chips. But he worries that could lead to a tit for tat. He cites when the U.S. placed levies against Mexican avocados, Mexico retaliated against U.S. grown potatoes. Canada and Mexico also placed phytosanitary restrictions against cherries and apples from the Pacific Northwest.
“It really feels like what they’re doing is they’re trying to build up a lot of, ‘Hey, if you don’t play ball with me, I’m going to employ these protectionist measures,’” he says. “It’s tough to say that that’s exactly where we’re headed, but it’s absolutely a concern, and something that we, as TIPA, and many other organizations in the fresh produce industry have said, ‘Administrations, don’t go that direction. In fact, take those things off the table, because you are going to hurt businesses, you’re going to hurt consumers and you’re going to hurt a very integrated supply chain that’s important for feeding North America.’”
Fresh Produce as a ‘Luxury Item’
It’s that integrated supply chain Galeazzi says is most likely to be hurt by a potential end to USMCA. He says the wide variety of fresh produce available year-round, from avocados to mangoes, thanks to free trade, is at risk of becoming far more expensive and potentially unavailable.
“The American consumer has not only been introduced to really kind of year-round availability on a lot of fresh produce items, we’ve also been introduced to a wide variety of fresh produce items we previously had no purview of,” he says.
He notes while fresh produce consumption has increased since the global pandemic, potential supply chain disruptions could worsen an already tough market. Consumers have already reported how rising inflation has impacted their shopping habits, with many now viewing fresh produce as a luxury item.
“What’s going to happen if we make fresh produce more expensive as a result of trade?” he says. “Consumption is going to go even further down. How is that a win for our industry? How is that a win for the American consumers?”
As organizations and associations advocate the importance of these free trade agreements, he says, “We’re trying to show them, look, you are setting off the one domino that’s going to knock down the entire line.”
Galeazzi encourages those in the fresh produce industry to contact their congressmen to share the importance of free trade and advocate for addressing the necessary concerns while maintaining the core structure of the agreement.
“Too many times we sit back and just expect that things are going to turn out okay,” he says. “Things will turn out okay, but they turn out okay because people speak up, because they say something, because they talk about what means something to them and what’s important. Our industry needs to speak up and say ‘We want USMCA. Yeah, we might want changes ... but we don’t need to blow it up. We don’t need to throw it out. We need to keep it, fix it and improve it.’”
