The Tomatoes Are Too Red For Some NAFTA Complainers

In 1991, I published “A Hesitant Handshake Between Neighbors”. It was a writeup about NAFTA. In the essay I pointed how that the United States had been relying on import quotas for trade protection before NAFTA. It seems that Donald Trump wants to go back to protecting U.S. jobs by limiting imports. To limit imports, sometimes, the U.S. would rely on ad-valorem taxes but mostly it preferred to limit imports to protect its national interest. The U.S. would use different techniques to limit imports. As I wrote in the essay, one of my favorites was “the tomatoes are too red,” although dolphins getting caught in the tuna nets were the most commonly types of forms the U.S. used to limit certain imports. But the “tomatoes are too red” has stuck with me over the years because a few readers argued that, at best, my statement was an exaggeration.

Fast track forward to 2017 and the “tomatoes are too red” comes back up along with NAFTA.

The argument is the same, a Florida tomato farmer is complaining about how his farm cannot compete with Mexican tomato farms. According to the Washington Post [2], tomato farmer Tony DiMare is hoping that Donald Trump successfully kills off NAFTA. DiMare argues that he’s “about free trade, but it has to be fair.” The problem is how to define fair.

Nonetheless, it is not the first time the Florida tomato growers are complaining about NAFTA. In 1998, then House Minority Whip David Bonior (D-Mich) blitzed through Florida and Georgia criticizing NAFTA. Bonior called his 500-mile tour the “Journey for Economic Justice”. In Florida, he argued “Hurricane NAFTA” had hurt the Florida tomato farmers the worst. [1]

The issue with the Florida tomatoes is that México offers an environment ideal for growing tomatoes. Florida is too humid for tomatoes. Mexican tomatoes, according to consumers, taste better and last longer because they are vine-grown. Their the field-grown tomatoes in Florida cannot compete flavor and longevity-wise.

Like before, the tomato farmers are arguing that the Mexican tomatoes are being sold “at artificially low prices.” It is the argument that is used, although the issue is not about prices, but rather about which farmers are in a better place to grow their tomatoes.

The Florida tomato farmers, along with some berry and melon farmers, are pushing for “anti-dumping” rules to be incorporated into NAFTA. Asking countries to refrain from purposely dumping consumer products at artificial process sounds reasonable, except that it is not about price dumping, but rather about carving out special provisions for certain economic sectors.

In the Washington Post article, Joseph Glauber succinctly spells it out; “There’s a lot of political power resting with a small group of individuals who have a lot to gain.” Glauber is a senior research fellow at the International Food Policy Research Institute, and a former chief economist at the Agriculture Department. On both sides of the border, the largest anti-open traders are mostly farmers who have been hurt by NAFTA. On the Mexican side, which was the birth of corn (maize), now imports corn rather than exporting it. México is the largest importer of U.S. corn. The Mexican corn farmers were severely hurt by NAFTA.

But if the Florida farmers can protect their farms, it will come at the expense of other U.S. farmers, mainly the corn growers. U.S. corn farmers have exported 43.7 million metric tons of corn this year alone. [USDA data] Most of it went to México.

Chad Hart, an economist at Iowa State University told the Washington Post, “The words we didn’t want to hear, in farm country, were ‘terminate NAFTA’” and that’s precisely what may happen if Trump and farmers, like the Florida tomato farmers, have their way.

When NAFTA was being negotiated, economists argued that México had severely limited its economic potential with its 80-year-old policy of protectionism, nationalism and excessive levies on imports.

Do these policies sound familiar? They should: “America First,” “American workers first” and taxes on imports to protect American jobs is Trump’s mantra.

Other U.S. farmers are lamenting the stance taken by the Florida farmers, pointing out the tomato farmers’ stance “have put everyone else’s business at risk.”

In the case of the Florida tomato farmers, the issue shouldn’t be about whether NAFTA has unfairly hurt their farms, but rather it should be about their inability to be competitive. As Aaron Lukas wrote in his JOC article, the Florida tomato farmers “should compensate consumers for years of overpriced tomatoes,” instead of complaining about NAFTA. [1]

The hypocrisy of many anti-NAFTA arguments is put on display as the debates continue. DiMare, the Florida tomato farmer, not only grows tomatoes on his farm but also brokers tomatoes from México to consumers. When asked about it by the Washington Post, DiMare stated that some of his tomatoes come from México because “it depends on what customers want…for some reason, some people want Mexican tomatoes.” [2]

Author’s note: yesterday the Canadian and Mexican delegation to the NAFTA negotiations rejected the ‘poisoned pill’ provisions included in the negotiations by the Trump administration. In tomorrow’s post, I’ll delve deeper into what it all means.

You can learn more about NAFTA by following this link.

Footnotes:
1. Lukas, Aaron, “Consumers See Red (Tomatoes)”, The Journal of Commerce; March 1, 1998
2. Dewey, Caitlin, “How a group of Florida tomato growers could help derail NAFTA”, The Washington Post; October 16, 2017

Advertisements