Georgia and Florida vegetable and specialty crop farmers are calling for a Section 301 investigation into unfair trade practices regarding Mexican imports.
But Auburn University Assistant Professor and Extension economist Adam Rabinowitz is concerned about the potential ramifications that could loom as a result.
Section 301
According to the International Trade Administration, Section 301 of the Trade Act of 1974 provides the United States with the authority to enforce trade agreements, resolve trade disputes, and open foreign markets to U.S. goods and services.
Rabinowitz said an investigation could lead to the U.S. imposing trade sanctions such as tariffs which would increase prices of inexpensive Mexican imports, in particular the fruit and vegetable crops. These are difficult for Southeast producers to compete against and were reasons that virtual hearings were necessary for the past two weeks with the U.S. Trade Representative’s Office.
Adam Rabinowitz
“We’ve seen the U.S. use this method against other countries for other industries. Representative (Robert) Lighthizer seems to be listening to the concerns. The one potential challenge may come from how Mexico may retaliate against any tariffs in that form,” Rabinowitz said. “There are concerns of other vegetable growers out west, there could be retaliation against some of their products that are flowing down into Mexico.
“I think there will be further investigation in this. I think things will be heard. It’s just a question or not 301 will be used to actually apply some tariffs or if there could be some other type of resolution through a side agreement with the Mexican government that may address some of those concerns.”
Virtual Hearings
Georgia farmers and industry leaders voiced their concerns on Thursday, Aug. 20 and Florida producers testified on Aug. 13. The hearings were established to provide the U.S. Department of Commerce (DOC) and United States Department of Agriculture an opportunity to hear from growers in both states about the urgent need for federal action regarding unfair trade, specifically with Mexican imports.
All who testified were consistent in their concerns about two main issues that are in Mexico’s advantage: government subsidies to Mexican producers and inexpensive labor.
“If those could be addressed outside of tariffs, that could be a potential solution. Otherwise, you start getting into some of the trade disputes that raise some other issues,” Rabinowitz said.
Georgia producers and industry leaders had their turn to testify on Thursday during a virtual hearing with the U.S. Trade Representative’s Office about unfair trade practices with Mexico. The hearings provided the U.S. Department of Commerce and Trump Administration an opportunity to hear from growers in Georgia about the urgent need for federal action regarding unfair trade.
This was the second virtual hearing following the one on Aug. 13 involving Florida farmers.
Georgia Agriculture Commissioner Gary Black believes a fair, healthy trade agreement is what is needed.
Gary Black
What is Needed?
Farmers discussed trade practices about various produce such as blueberries, pecans, blackberries and cucumbers and how the future of the American farmer is at stake. Most farmers called for a 301 investigation into Mexico.
Adam Rabinowitz, Auburn University Assistant Professor and Extension Economist, explained that a 301 Investigation is part of the Trade Act of 1974 and allows the U.S. to engage in trade activity, whether it be trade agreements but also resolving trade disputes. The idea was that the U.S. could access foreign markets but also that domestic markets were not impacted.
An investigation could lead to the U.S. imposing trade sanctions such as tariffs which would increase prices of inexpensive Mexican imports, in particular the fruit and vegetable crops, that are difficult for Southeast producers to compete against and were reasons that hearings were necessary in the first place.
The list of speakers included Congressmen Austin Scott (GA-08) and Buddy Carter (GA-01); Georgia Ag Commissioner Gary Black; Gerald Long, Georgia Farm Bureau Federation; Charles Hall, executive director of the Georgia Fruit and Vegetable Growers Association; as well as various farmers, including Russ Goodman (Cogdell Berry Farm), Sam Watson (Chill C Farms) and Bill Brim (Lewis Taylor Farms, Inc.).
Unfair trade practices regarding Mexican imports is a key reason for hearings the last two weeks with Florida and Georgia farmers and industry leaders.
Frustrated Florida vegetable and specialty crop farmers are calling for a 301 investigation into unfair trade practices concerning Mexican imports.
Dustin Grooms, a fourth-generation farmer in Plant City, Florida, made his case while testifying in a virtual hearing with the U.S. Trade Representative’s Office on Aug. 13.
“It goes back to what all the other growers are saying, at this time, I think we need to move forward with the 301 and start there and see where it leads to; see what happens and we can build upon that and get to a solution,” Grooms said.
What is a 301 Investigation?
Adam Rabinowitz, Auburn University as Assistant Professor and Extension Economist, explained that a 301 Investigation is part of the Trade Act of 1974 and allows the U.S. to engage in trade activity, whether it be trade agreements but also resolving trade disputes. The idea was that the U.S. could access foreign markets but also that domestic markets were not impacted.
An investigation could lead to the U.S. imposing trade sanctions such as tariffs which would increase prices of inexpensive Mexican imports, in particular the fruit and vegetable crops, that are difficult for Southeast producers to compete against and were reasons that hearings were necessary with Florida agriculture leaders and Georgia leaders on Aug. 20.
Grooms said the impact Mexico has had on his strawberry operation led to a significant drop in acreage of 125 acres, down from 235.
“Mexican imports have crippled our strawberry prices in Florida as well as other crops. This issue has continued for far too long without a solution. The seriousness of the seasonality issue has been recognized by Congress and the U.S. Government dating back to 2002 trade promotion authority legislation which instructed the U.S. Government to fix the problem,” Grooms said. “The same instruction was repeated in a 2015 TPA law and every administration over the past two decades has acknowledged the pressing need to get a solution in place. Yet, nearly 20 years later, farmers are still left defenseless against unfair Mexican trade practices.”
Grooms’ farming operation, ‘Fancy Farms,’ has had to sell off land to pay bills and have money to farm the following year. He made a passionate plea that change is needed and needed now.
“The future of Florida agriculture is at a pivotal point in time. We need change to be able to continue our legacy of farming from one generation to another,” Grooms said. “We can grow all kinds of foods here in Florida if we’re given the chance. But with the Mexican imports looming over us, I’m afraid the future of Florida’s agriculture fate might be destined for failure.”
Raises concern over Mexico’s unfair trade practices and its effect on Georgia farmers
ATLANTA, Ga. – Rep. Doug Collins (R-Ga.) testified today on Mexico’s unfair trade practices that are severely and negatively impacting Georgia’s seasonal and perishable produce farmers during a virtual hearing hosted by the Office of the U.S. Trade Representative (USTR), the U.S. Department of Agriculture (USDA), and the U.S. Department of Commerce (DOC). The virtual hearing was held to allow stakeholders – including growers, producers, and farmers – an opportunity to continue conversations with USTR about how best to address unfair foreign trade practices.
Last month, Collins and Rep. Austin Scott (R-Ga.) sent a letter to U.S. Trade Representative Robert Lighthizer urging the Administration to protect Georgia farmers from Mexico’s unfair trade practices as it works to implement the United States-Mexico-Canada Agreement (USMCA).
To watch Collins’ testimony, click here or on the image below.
Remarks as prepared:
Good afternoon and thank you for the opportunity to speak today about the important issues facing the seasonal and perishable produce industry in Georgia and throughout our country. Ambassador Lighthizer, Secretary Perdue, and Secretary Ross, thank you for having me today to share my views and concerns on behalf of Georgia’s agricultural industry.
Before I begin my testimony, I want to commend the efforts of this Administration in coming together to achieve a momentous trade deal in the United States-Mexico-Canada Agreement (USMCA). There is no denying that that this historic trade deal will increase our global competitiveness, strengthen our economy, and support our farmers. I am grateful for these efforts and the outcome – I know that Georgians will appreciate the effects of this agreement on our economy and I appreciate the President and his Administration’s hard work to get America a better deal.
Over the last several months, we have seen our nation’s farmers, growers, and producers struggle through the economic downturn wrought by the coronavirus pandemic. At the Federal level, it has been a priority of mine to safeguard the livelihoods of Georgia’s hardworking farmers who have never stopped working to put food on the tables of families across the country. This includes my work with this Administration to ensure the H-2A workforce many of Georgia’s growers depend on was not unnecessarily reduced. Unfortunately, the pandemic is unforgiving, but I will continue working with my colleagues in the Georgia delegation to make sure our farmers, growers, and producers are taken care of.
Unfortunately, Georgia’s growers and producers of seasonal and perishable goods continue to face a threat outside of the coronavirus, and that threat must be highlighted and addressed at the Federal level. Over the past several years, the agricultural market for seasonal and perishable goods has seen a growing saturation of Mexican products as a result of that country’s unfair trade practices. It is my hope that this hearing is the Administration’s first step in addressing this unfair trade dynamic.
As you may know, Mexico’s increased market share of produce and perishable goods at record-low prices in the United States has severely and negatively impacted the Southeast’s seasonal and perishable produce farmers. To provide an example of one commodity that has been disastrously struck by Mexico’s practices – Mexico’s share of the U.S. blueberry market has gone up by 2,111% over the last ten years. Such an increase obviously shuts out growers of one of Georgia’s top commodities, blueberries, and deprives Georgia and the country of the benefits a thriving, American-majority blueberry market could have on my state’s economy and the national economy as a whole.
Why has Mexico obtained such a massive stake in our produce market? Because the government of Mexico began to subsidize the development of Mexico’s produce industry. These subsidies have operated to distort trade and, coupled with Mexico’s unfair pricing practices, have resulted in Mexico obtaining an undeniable advantage in the U.S. market. This has continued to happen over the last decade at the expense of our growers.
While the USMCA will make great advancements in trade for many industries across the country, recent studies indicate that – even with the full implementation of USMCA – Georgia stands to lose nearly $1 billion in annual economic output in the grower industry. The same study shows that industry could lose over 8,000 jobs. It goes without saying what this could mean for many of the families that I represent who depend on the paychecks they receive from growing and producing. The outlook is grim and these consequences would be devastating.
For many growers, the consequences of continuing to allow Mexico to get away with its trade-distorting practices will be Earth-shattering. In Georgia, we are lucky to have a growing economy made of many smaller growers that produce a diverse portfolio of commodities. For these small growers, it is up to us – Federal officials in the legislative and Executive branches – to work together to make sure their voices are heard, and their needs met.
I am committed to finding a solution to this issue and I hope that the USTR, USDA, and Department of Commerce will work with my office to ensure Georgia’s farmers, growers, and producers are no longer negatively impacted by Mexico’s unfair trade practices and that we can regain control of the U.S. seasonal and perishable goods market.
I’d like to echo the testimony of Georgia’s stakeholders in requesting that a Section 301 investigation be undertaken so that the Executive Branch can wield its full power in addressing Mexico’s trade practices – including its use of subsidy programs. I stand ready to support such an investigation in any way that I can.
With the country in the early months of USMCA’s implementation, I am glad to see that USTR is continuing its conversations with Georgia farmers and I am hopeful that we can come together and find a solution before Georgia’s growers face more needless economic damage.
Thank you again for having me today and I look forward to working with each of you on this important issue.
Georgia farmers and industry leaders testified on Thursday in virtual hearings with the U.S. Trade Representative’s Office regarding unfair trade practices with Mexico. Each producer shared similar thoughts that some action must be taken, such as a 301 Investigation, because the future of the American farmer is at stake.
The hearings provided the U.S. Department of Commerce and Trump Administration an opportunity to hear from growers in Georgia about the urgent need for federal action regarding unfair trade.
Steve McMillan, with Southern Grace Farms in Berrien County, Georgia, talked about the impact Mexican imports have had on the blackberry industry.
Steve McMillan
Richard Minor with Minor Brothers Farm in Americus, Georgia, talked about the impact Mexico has had on the cucumber industry.
Richard Minor
Bill Brim, co-owner of Lewis Taylor Farms in Tifton, Georgia, talked about how government subsidies have aided Mexican farmers.
Bill Brim
Adam Rabinowitz, Auburn University as Assistant Professor and Extension Economist, explained that a 301 Investigation is part of the Trade Act of 1974 and allows the U.S. to engage in trade activity, whether it be trade agreements but also resolving trade disputes.
Georgia Ag Commissioner Gary Black testified on Thursday in a virtual hearing with the U.S. Trade Representative’s Office regarding unfair trade practices with Mexico.
Black testified about the impact of Mexican imports have had on trade health. He specifically mentioned pecans and the impact on Georgia growers.
U.S. Congressman Austin Scott (GA-08) testified on Thursday during a virtual hearing with the U.S. Trade Representative’s Office regarding unfair trade practices with Mexico.
Scott focused on the importance of the country’s ability to feed itself.
Georgia producers and agricultural industry leaders will testify in a virtual hearing on Thursday with the U.S. Trade Representative’s Office (USTR). The hearings will provide the U.S. Department of Commerce (DOC) and United States Department of Agriculture an opportunity to hear from growers in Georgia about the urgent need for federal action regarding unfair trade, specifically with Mexican imports.
This is the second of two virtual hearings to be held. The first involved Florida growers and industry leaders on Aug. 13.
USTR, USDA, and DOC announced last month they would convene two virtual hearings at which officials from the federal agencies would hear from growers and industry leaders on how the Trump Administration can support these producers and redress any unfair harm.
Thursday’s virtual hearing is scheduled for 9 a.m. EDT.
The hearing is open to the public, and a link to watch the hearing will be available on USTR’s website here on August 20.
Bill Brim
The list of scheduled speakers include Congressmen Austin Scott (GA-08) and Buddy Carter (GA-01); Georgia Ag Commissioner Gary Black; Gerald Long, Georgia Farm Bureau Federation President; Charles Hall, Executive Director of the Georgia Fruit and Vegetable Growers Association; as well as various farmers, including Russ Goodman (Cogdell Berry Farm), Sam Watson (Chill C Farms) and Bill Brim (Lewis Taylor Farms, Inc.)
A full list of scheduled speakers can be found here.
File photo shows strawberries boxed up after harvest.
Florida Strawberry Growers Association
Dover, Fla. (August 18, 2020) – U.S. trade officials and federal agencies held the first of two virtual meetings on August 13 with the agriculture industry to hear testimonies on unfair trade practices with Mexico. More than 35 witnesses testified to a hearing committee consisting of representatives from the Office of the U.S. Trade Representative, U.S. Department of Agriculture, and the U.S. Department of Commerce.
As Senator (Marco) Rubio, congressmen, Florida’s Commissioner of Agriculture and Consumer Services, economist Dr. Zengfei Guan, and producers from across the state and even the country testified, reoccurring concerns of unfair trade practices, government subsidies and loss of market share came up repeatedly.
“We are not looking for a handout, just a fair chance in the fight,” said Executive Director of the Florida Strawberry Growers Association, Kenneth Parker.
The concern of crisis is of the winter specialty crop market in Florida and now into Georgia and beyond.
“In my 33 years of operating the farm, our greatest challenge has been increased Mexican competition…,” said John Sizemore of Sizemore Farms. Industry members pleaded for a Section 301 to be filed against Mexico to investigate the trade practices.
The United States-Mexico-Canada Agreement (USMCA) that was passed and became effective on July 1, 2020, neglected to include seasonal and perishable crops. U.S. Trade Representative Robert Lighthizer made a commitment to the seasonal and perishable fruit and vegetable industry in Florida that he would address the issue of unfair trade practices with Mexico; therefore, these hearings are a result of that commitment. A second virtual hearing will take place on Thursday addressing the seasonal and perishable produce industry Georgia. The hearing will be streamed through the USTR website and transcripts will also be available from both hearings.
Russ Goodman Talks About Impact of Unfair Trade Ahead of Thursday’s Virtual Hearing
United States of America and Mexico waving flag
A prominent blueberry producer in Southeast Georgia believes the future of the American family farm could hinge on any action taken as a result of the virtual hearing scheduled for Thursday.
Russ Goodman is one of several farmers and industry leaders in Georgia who will testify in a virtual hearing on Thursday with the U.S. Trade Representative’s Office. The hearings will provide the U.S. Department of Commerce and Trump Administration an opportunity to hear from growers in Georgia about the urgent need for federal action regarding unfair trade.
“We started growing blueberries in 2000. In 2010, we hear rumblings about (Mexico) and people saying, ‘Mexico’s going to put you guys out of business.’ I heard that kind of stuff. I normally don’t pay a lot of attention to things like that because you hear a lot of generic statements,” said Goodman, a farmer in Cogdell, Georgia. “In 2010, they sent 1.8 million pounds. Last year they shipped in 63 million pounds. I’m fearful that if something isn’t addressed what it means.
“It’s not only with Mexico, which is what these hearings are about, USMCA and Mexico and specifically how that affects us, but my friends in the north in Michigan have been farming blueberries for three and four generations. They’re being affected the same thing with Peru right now.”
Labor Disadvantage
The biggest concern with farmers in Georgia and Florida – where hearings were held last week – in competing with Mexican imports is the cost of labor. What American farmers have to pay per hour, Mexican farmers can charge per day. How can American growers compete?
“A third of your costs is going to be labor. They’re down there paying one-tenth of what we’re paying in labor. You take any business on God’s green earth where your competition has a 90% advantage over something that’s a third of your overhead, they’ll eventually put all their competition out of business. The scary thing is, that competition comes in the form of the American family farm,” Goodman said.
He estimates Mexican farmers only have to pay 81 cents per hour as a minimum wage.
“You don’t have to have a Ph.D. in economics to see what’s happening and what it’s going to mean long term. We’ve got a blueprint of what’s happened in the past, the tomato industry in Florida. That’s just going to keep going into other things,” Goodman said. “They’re planting 20,000 acres of pecans a year in Mexico from my understanding. I just think we’ve got to, especially in light of this pandemic, we’ve got to re-evaluate where we’re at as far as food security. What keeps us food secure is the American family farm,” Goodman said.
