Politics & Government

Dispute drives tariff on state's apple crop

YAKIMA - Washington apple growers are going to take an estimated $44 million hit this year from a new Mexican tariff, another chapter in a trade dispute that has already hurt cherry and pear growers.

The 20 percent tariff took effect Thursday and affects all U.S. fresh apple sales to this state’s largest export market.

State apple marketers have sold almost 10 million boxes of apples to Mexico during the current 2009-10 marketing season, a slight decline from the same period a year earlier when the state harvested its largest crop to date.

The tariff takes effect as Washington state is preparing to harvest what could be a record crop. Washington is the nation’s leading apple-producing state.

Mexico takes almost a third of all Washington apples exported.

“It’s going to make it more difficult and more expensive to sell into that market,” said Peter Verbrugge, president of Sage Fruit of Yakima.

Mark Powers, vice president of the Northwest Horticultural Council, called the tariff unfortunate and frustrating, but not surprising.

The tariff is seen as a retaliatory move in a dispute over Mexican trucks not being allowed to make deliveries inside the United States.

Mexican government officials said the U.S. refusal to allow access violates the North American Free Trade Agreement.

Mexico initially imposed tariffs on cherries, pears and other products in March 2009, when an 18-month pilot program on access for Mexican trucks ended.

Since then, no progress has been made on resolving the dispute despite industry pleas to Congress and the administration.

With the tariff in place, a $20 box of apples would cost $24. But Powers said the net effect would be the price would be lowered to offset the tariff, reducing the return to growers.

“That is the net effect,” Powers said. “What comes back to the grower is going to be less by the amount of the tariff.”

Red Delicious and Golden Delicious apples are the largest sellers in Mexico, accounting for 7.1 million boxes sold so far this year. Other varieties such as Granny Smith, Fuji and Gala also are sold in Mexico.

The tariff comes just five months after Mexico removed a 47 percent duty on Red Delicious and Golden Delicious apples that had been in place for 14 years.

Mexico had imposed the duty in response to a finding that Washington apples had been sold in Mexico below the cost of production.

Industry officials denied dumping occurred.

Mexico, at the direction of a NAFTA review panel, revisited the basis for the duty. The government concluded in February it could not support the earlier finding of dumping.