By SHELLY STRAUTZ-SPRINGBORN
Michigan Correspondent

LANSING, Mich. — Michigan farmers could fall victim to a cross-border trade dispute between the United States and Mexico.

In retaliation to a U.S. breach of the North American Free Trade Agreement (NAFTA), Mexico has imposed tariffs on nearly 90 U.S. products. Thirty-six agricultural products including fresh fruits and vegetables, fruit and vegetable juices, wine and processed food exports – valued at approximately $864 million – are included on the list. Agriculture industry officials fear that Mexico is considering expanding the list to include corn, beans, wheat and soybeans.
The dispute was set in motion in late March when Congress voted to end the Transportation Department’s Cross Border Trucking Pilot Program. Of concern was the safety of Mexican trucks on U.S.
roadways. The pilot program had allowed Mexican trucks to ship goods deep within U.S. borders. Under the terms of NAFTA, the U.S. and Mexico each agreed to allow trucks from the other nation access into their countries. But, the U.S. continued to restrict Mexican trucks from crossing the border even after NAFTA implementation began, thus falling out of compliance with NAFTA provisions.

In retaliation, Mexico imposed tariffs on the products – totaling more than $2.4 billion in American goods exported to Mexico. Mexico is the second-largest U.S. export market. In the last year U.S. products shipped there increased by more than 11 percent, totaling more than $150 billion.

To date, Mexico officials have avoided products in the country’s “basic basket” including corn, rice, wheat and others, but some U.S. agriculture officials are afraid it’s only a matter of time before those commodities also face stiffer tariffs.

Michigan exports about 22 percent of its 200 agricultural commodities, with the top five agricultural exports being soybeans, feed grains, vegetables, fruits and dairy products, according to the Michigan Farm Bureau. The majority of Michigan’s agricultural exports are to Canada, but Mexico ranks among the state’s top five export markets. Annually, Michigan’s agricultural exports generate more than $1.2 billion and employ more than 13,800 residents.

Bob Green, executive director of the Michigan Bean Commission, said that while dry beans currently are not included on the list of commodities affected by the tariffs, it’s possible they will be added.
“Dry beans are not involved as of yet, but we feel that we could be next on Mexico’s hit list,” Green said. “What worries us is that a senator from North Dakota is the one that started all this. The big thing that goes out of North Dakota is beans, so that’s why we’re afraid that beans are going to be the next big target.”

The American Farm Bureau Federation (AFBF) has asked President Obama to seek a quick resolution that would ensure safe vehicles on U.S. roadways and put the U.S. back into compliance with its NAFTA obligations.

The Michigan Farm Bureau (MFB) is asking the same of Michigan’s Congressional delegation, according to MFB Associate National Legislative Counsel Ryan Findlay.

“Export markets are critical to Michigan agriculture and we have urged the Michigan Congressional delegation to act quickly in helping the administration develop a new program as soon as possible,” Findlay said.

“The two countries have enjoyed a mutually beneficial trading relationship and there is a lot at stake for both nations.”

AFBF President Bob Stallman said the NAFTA panel’s ruling gives Mexico the right to retaliate against U.S. products entering Mexico, and the action by Congress “has come at a cost to U.S. agriculture.”

A delay in federal action will only prolong the negative impact on U.S. farmers, he said.