USMCA: Protecting local interests through an international trade deal

Mark Stennes is the interim CEO of Chelan Fruit and a fourth-generation apple, pear and cherry grower

For farmers and small businesses in our region, there will be no more important debate in Congress this year than the future of NAFTA, now called the U.S.-Mexico-Canada-Agreement or USMCA.

No matter what you call it, free trade with Canada and Mexico is a lifeline for jobs and the overall economy of our region — Canada is the United States’ number two export market, Mexico is number three.

My family grows apples, pears and cherries throughout Eastern Washington. Our fruit is packed by Chelan Fruit Cooperative and sold through Chelan Fresh marketing based in Chelan. We as growers, packers and shippers are one small part of the Washington fruit industry.

The apple industry supports nearly 40,000 direct jobs in growing and packing in Washington with 21,000 indirect jobs in support industries spanning all congressional districts in the state. Washington is the leading apple producing state, accounting for 65 percent of the U.S. fresh apples market and 90 percent of U.S apple exports.

Mexico is Washington’s No. 1 export market, accounting for approximately 10 percent of the total fresh apple crop while Canada is the top export destination for organic apples, which my family grows. Washington’s organic category has grown by 24 percent in the last year as many growers have converted their orchards to meet this consumer demand.

Washington apples experienced a steady decline in shipments from the time of the U.S.announcement of the 232 tariff in March, through August. In the first three months of the 2018-19 season, shipments were down 33.6 percent compared to 2017-18.

Due to these declines, the consideration of United States-MexicoCanada Agreement (USMCA) comes at a time of great anxiety for farmers and businesses here in Washington and across the country. New tariffs and retaliation for those tariffs have penalized the very people whose exports help drive job creation and economic growth. The ongoing trade war with Mexico and Canada has resulted in painful tariffs on both sides of the border.

These ongoing trade tensions — and the uncertainty they’ve unleashed — reinforce the need for a major trade victory like the passage of USMCA, which would provide needed stability to allow farms/small businesses like mine to plan for the long term. North American trade is about long-term, sustainable relationships and contracts. USMCA would restore that certainty.

USMCA consideration will also have the added benefit of creating pressure to end ongoing tariffs on Canada and Mexico that, if continued, would wipe out any benefits Washington state would gain from USMCA.

That’s because we have every expectation that bipartisan members of Congress, including the full Washington state delegation, will demand an end to those harmful tariffs on Canada and Mexico in exchange for moving forward on USMCA.

If they don’t achieve the removal of those tariffs, they should not move forward with USMCA consideration.

The stakes are enormously high. Failure to pass USMCA and end the harmful tariffs in place on Canada and Mexico could result in the worst possible outcome: Withdrawal from the current NAFTA.

In that scenario, our region would be among the biggest losers. Not only would withdrawal mean the loss of an estimated 40,000 jobs, it would also mean a losses in the billions in economic production in our state, hitting farmers particularly hard. Signature state exports like fruit and tree nuts would see a $200 million reduction alone. And as our farmers know all too well, once you lose a market, it’s hard to get it back.

Tariffs, which are taxes on farmers and business owners, would also skyrocket, particularly in Mexico where a withdrawal would mean double-digit tax increases on Washington state exports.

For all these reasons, our state’s elected representatives in Washington D.C., must be ready to fight for the passage of this agreement and the repeal of the existing tariffs as soon as possible.

As we have seen with other trade agreements that are vital for Washington state, delaying passage only invites interest-group driven politics that will imperil the agreement. Call your member of Congress today and ask them to support the USMCA.

Mark Stennes is the interim CEO of Chelan Fruit and a fourth-generation apple, pear and cherry grower.

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