Arizona Congressional delegation calls for “free, fair, and reciprocal” trade with Mexico

Arizona Senators Martha McSally and Kyrsten Sinema joined Representatives Tom O’Halleran, Greg Stanton, Debbie Lesko, Andy Biggs, David Schweikert, Ruben Gallego, and Raul Grijalva in urging U.S. Trade Representative Robert Lighthizer to protect “free, fair, and reciprocal trade” with Mexico.

The letter comes amid discussions among Trump Administration officials over whether to implement a new “seasonal trade remedy” to protect growers in the Southeast U.S., which the delegation argues will hurt Arizona importers and shoppers. 

By  increasing barriers to the importation of Mexico fresh tomatoes in the form of tariffs or duties, the policy could potentially raise prices for domestic consumers.

Complicating matters is Florida and Georgia’s importance to the president’s reelection. 

Disputes linger despite USMCA implementation

Following the ratification of the U.S-Mexico-Canada Agreement (USMCA), a landmark trade agreement that replaced the North American Free Trade Agreement (NAFTA), the three North American powers are still debating the implementation of new rules.

Mexican firms, for instance, have been recently accused by American petroleum companies of participating in unfair trade practices that “[throw] up roadblocks to American companies seeking permits for new or rebranded gas stations, energy storage facilities, and liquefied natural gas terminals,” said Gary Clyde Hufbauer, a nonresident fellow at the Peterson Institute for International Economics.

Hufbauer said that “faithful implementation of the United States-Mexico-Canada Agreement is… important” for all member nations.

In the past weeks, President Trump was also accused of stymying the process of implementation when he signed a 10% increase in aluminum tariffs on Canada after they had been lifted more than a year earlier.

In response, Canada levied $2.7 billion in tariffs on American goods.

Despite the disputes, business leaders and economists remain optimistic that the USMCA will stimulate economic expansion.

Agriculture

The commercial relationship between Arizona and Mexico is significantly bolstered by the flow of imported Mexican produce to the state. 

Since the turn of the century, Arizona has seen an expanded agricultural importation relationship with Mexico, according to the University of Arizona’s Eller College of Management.

The dispute arising from the importation of Mexican agricultural products, specifically tomatoes and avocados, arose in 2019 when Trump Administration officials voiced concerns regarding “increasing organized crime activity in Michoacán — the main avocado producing state in Mexico.” 

They also had separate worries surrounding competition between the U.S. agricultural sector and the Mexican agricultural sector.

Accounting for 30% of all Mexico-grown tomato imports, the Nogales, Ariz. commercial port of entry is key to the Southwestern economy and Arizona commerce. This places Arizona at the center of the current conflict.

A 2018 study by UArizona found that U.S. and Canadian importation of fresh tomatoes from Mexico is responsible for more than 30,000 U.S. jobs. 

Economic impacts

In 2019, when the U.S. considered levying a 17.5% tariff on Mexican tomatoes, economists from Arizona State University predicted that “consumers could pay 40% to 85% more for vine-ripe and other fresh tomatoes.”

If the U.S. administration establishes protectionist trade remedies, trade advocates  worry that Mexico will retaliate in kind againstAmerican imports. 

In January, Mexican Deputy Trade Minister Luz Maria de la Mora said, “If the U.S. government seeks any action of this kind against Mexican agricultural exports, the government of Mexico will apply similar measures to U.S. products.”

As occurred last week between the U.S. and Canada, there is a possibility of a new trade dispute erupting — this time along the Southern border.