T he United States has initiated renegotiations of the North American Free Trade Agreement (NAFTA) with Canada and Mexico. The Administration's agriculture-related objectives in the renegotiation include a contentious proposal to establish trade remedies for perishable and seasonal products. The proposal would establish separate domestic provisions for seasonal products such as fruits and vegetables in anti-dumping and countervailing duties (AD/CVD) proceedings, making it easier to initiate a trade remedy case against (mostly Mexican) exports to the United States. The proposal responds to complaints by some fruit and vegetable producers, mostly in Southeastern states, who claim to be adversely affected by import competition from Mexico. Other reports indicate that the proposal seeks to modify U.S. AD/CVD laws by allowing growers to bring an injury case by domestic region and draw on seasonal data. This differs from current law, which requires that an injury case be supported by a majority (at least 50%) of the domestic industry, whereas USTRs seasonal proposal would allow regional groups representing less than 50% of nationwide seasonal growers to initiate an injury. This would make it easier for a group of regional producers to initiate trade remedy cases even if the majority of producers within the industry, or in other regions, do not support initiating an injury case. Also, under current law, three years of annual data are necessary to prove injury, whereas the proposal would allow for the use of seasonal data to prove injury. Produce Imports from Mexico

		Trends in U.S. Imports

Mexico's production of some fruits and vegetables—tomatoes, peppers, cucumbers, squash, berries, and melons—has increased sharply in recent years. In large part, Mexico's increased production and export supplies are attributable to its investment in large-scale greenhouse production facilities and other types of technological innovations, among other factors. Support for Mexico's Protected Agriculture28

The Florida Fruit and Vegetable Association (FFVA) claims that Mexico's investment in its greenhouse production has been supported by government subsidies that should be addressed through higher CVDs on U.S. imports of some products. Concerns have mostly centered on U.S. imports of tomatoes, peppers, strawberries, raspberries, and blueberries. In addition, FFVA also claims that Mexico's fruit and vegetable imports are sold to the United States at prices below the cost of production and alternatively could be countered by imposing higher AD duties. Support and Opposition for a Seasonal Provision

The perishable and seasonal provisions in USTR's NAFTA objectives have divided the U.S. fruit and vegetable industry, and opinions are split between producers in some Southeastern states and producers in other states, such as California. Opinions in Congress are also divided. Some in Congress support USTR's seasonal proposal, claiming that it is necessary to address perceived unfair trading practices by Mexican exporters of fresh fruits and vegetables. Others in Congress oppose including the proposal, contending that seasonal production complements rather than competes with U.S. growing seasons. They also worry that it could open the door to an "uncontrolled proliferation of regional, seasonal, perishable remedies against U.S. Mexican trade officials do not support seasonal proposals, nor do they support limiting access for some products. Other reports indicate that Mexico is considering retaliation by including its own list of protected products in response to the U.S. proposal. Such a list could include certain grain and pork products and other types of limitations to protect Mexican products in certain production areas. The U.S. food and agriculture industries have much at stake in the current NAFTA renegotiations. Canada and Mexico are the United States' two largest trading partners, accounting for 28% of the total value of U.S. agricultural exports and 39% of its imports in 2016. Under NAFTA, U.S. agricultural exports to Canada and Mexico have increased sharply, rising from $8.7 billion in 1992 to $38.1 billion in 2016.
The United States has initiated renegotiations of the North American Free Trade Agreement (NAFTA) with Canada and Mexico. Among the Administration's agriculture-related objectives in the renegotiation is a proposal to establish new rules for seasonal and perishable products, such as fruits and vegetables, which would establish a separate domestic industry provision for perishable and seasonal products in anti-dumping and countervailing duties (AD/CVD) proceedings. This could protect certain U.S. seasonal fruit and vegetable products by making it easier to initiate trade remedy cases against (mostly Mexican) exports to the United States and responds to complaints by some fruit and vegetable producers, mostly in Southeastern U.S. states, who claim to be adversely affected by import competition from Mexico.
Mexico's production of some fruits and vegetables—tomatoes, peppers, cucumbers, berries, and melons—has increased sharply in recent years, in large part due to Mexico's investment in large-scale greenhouse production facilities and other types of technological innovations. Some claim that this investment is supported by government subsidies and should be addressed through higher countervailing duties (CVD) on U.S. imports of these products. They also claim that these imports are sold to the United States at prices below the cost of production and alternatively could be countered by higher anti-dumping (AD) duties. Concerns have mostly focused on U.S. imports of tomatoes, peppers, and berries.
The Administration's seasonal proposal is among the more contentious of the agricultural proposals reportedly considered by U.S. negotiators. The proposal would likely require changes to U.S. AD/CVD laws by allowing growers to bring an injury case by domestic region and draw on seasonal data. Under current law, an injury case must be supported by a majority (at least 50%) of the domestic industry. The Administration's proposal could reportedly allow regional groups—representing less than 50% of producer nationwide—to initiate an injury, even if the majority of producers within the industry, or in other regions, do not support initiating an injury case. Also, under current law, three years of annual data is necessary to prove injury, whereas the proposal would allow for the use of seasonal data to prove injury.
The seasonal proposal has divided the U.S. fruit and vegetable industry, and opinions are split between producers in some Southeastern states and producers in other states, such as California. Opinions in Congress are also divided. Some in Congress support the seasonal proposal, claiming that such a change is necessary to address perceived unfair trading practices by Mexican exporters of fresh fruits and vegetables. Others in Congress oppose including the proposal, contending that seasonal production complements rather than competes with U.S. growing seasons. They also worry that this change could open the door to retaliation by U.S. trading partners and to the imposition of similar regional and seasonal remedies against U.S. exports.
Mexican trade officials also do not support including a seasonal AVD/CVD proposal as part of the NAFTA renegotiations, nor do they support limiting access for some products. Some reports indicate that Mexico is considering retaliation by including its own list of protected products in response to the U.S. proposal. Such a list could include certain grain and pork products and other types of limitations to protect Mexican products in certain production areas.
The U.S. food and agriculture industries have much at stake in the current NAFTA renegotiations. Canada and Mexico are the United States' two largest trading partners, accounting for 28% of the total value of U.S. agricultural exports and 39% of its imports in 2016. Under NAFTA, U.S. agricultural exports to Canada and Mexico has increased sharply, rising from $8.7 billion in 1992 to $38.1 billion in 2016.