Canada, Mexico and the United States combine to make up one of the most competitive and successful regional economic platforms in the world. The success of this regional trading relationship depends largely on economic and commercial cooperation, integration and policy alignment.
The apple industry has benefited greatly under the North American Free Trade Agreement (NAFTA). Prior to the agreement, Mexico imposed a 20 percent tariff on U.S. apples. With duty-free access, Mexico is now our largest export market followed by Canada. Since the enactment of NAFTA, apple exports to Mexico quadrupled and those to Canada have doubled. Export sales to the two markets total nearly $450 million annually.
The United States-Mexico-Canada Agreement (USMCA) maintains duty-free access as well as other key protections for the industry. The apple industry strongly supports ratification of the USMCA.
The apple industry is being negatively impacted by U.S.-imposed section 232 tariffs on steel and aluminum as Mexico has retaliated with 20 percent (pre-NAFTA level) tariffs, and Canada could add apples to their list at any time.
In FY19, the apple industry received more than $5 million in export market development funds from the U.S. Department of Agriculture’s (USDA) Market Access Program (MAP). These funds are matched by grower dollars to promote apples in more than 25 countries throughout the world.
Since this program’s inception in 1986, the U.S. apple industry has expanded fresh apple exports by nearly 150 percent, due in large part to the overseas promotions made possible by MAP. U.S. fresh apple exports exceed $950 million.
The Technical Assistance for Specialty Crops Program (TASC) is another important tool for the industry as it helps resolve phytosanitary and technical barriers that prohibit or threaten apple exports.
The Foreign Agriculture Service (FAS) plays a critical role in administering export development programs such as MAP and TASC. Full funding of FAS is essential if the agency is to maintain its overseas presence and effectively administer the agency’s export efforts.
The future of the U.S. apple industry may be determined in large part by the industry’s ability to improve its access to foreign markets through negotiation of free trade agreements with overseas customers.