January 30, 2020 / 6:35 PM / in 2 months

Exclusive: New tensions surface over U.S.-Mexico seasonal farm trade

MEXICO CITY (Reuters) - Fresh battle lines are being drawn that could lead to farm trade restrictions between the United States and Mexico, a letter from a top Mexican trade official seen by Reuters shows, despite the goodwill generated by the newly signed North American trade pact.

FILE PHOTO: The US flag (L), and the Mexico's flag are pictured on the international border bridge Paso del Norte in between El Paso US and Ciudad Juarez in Ciudad Juarez, Mexico December 28, 2016. REUTERS/Jose Luis Gonzalez/File Photo

In response to a letter earlier this month from the top U.S. trade negotiator pledging protectionist measures for farmers in the politically important states of Florida and Georgia, Mexico is promising to retaliate in kind if such steps are taken.

“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,” Mexican Deputy Trade Minister Luz Maria de la Mora wrote in the letter seen by Reuters.

The letter, obtained from a third party, was addressed to the head of Mexico’s National Farm Council, or CNA, and dated Jan. 27, just two days before U.S. President Donald Trump triumphantly signed the revamped North American trade deal, known as the U.S.-Mexico-Canada Trade Agreement (USMCA), in Washington, attended by smiling American farmers as well as senior Mexican officials.

CNA President Bosco de la Vega said in an interview he anticipates the U.S. measures would likely target “successful” Mexican exports including tomatoes, berries and mangos.

Such exports are worth some $12 billion annually and support about 1.4 million Mexican jobs, according to CNA data.

“This is about (U.S.) politics and Mexico’s private sector is extremely concerned,” de la Vega said.

In her letter, de la Mora said she had relayed her “worry” to American officials over the protectionist signal given by U.S. Trade Representative Robert Lighthizer in a letter sent earlier this month to U.S. lawmakers from Florida.

In the Jan. 9 letter, Lighthizer - also Trump’s chief USMCA negotiator - pledged to explore new protections for farmers in Florida and Georgia.

Florida in particular is seen as a key swing state in the 2020 presidential election in which Trump is seeking a second four-year term.

Lighthizer explained the Trump administration recognized farmers’ “continuing concern that certain unfair, non-market trade practices” that have led to more foreign competition and “unfair pricing.” He promised to release a plan to implement measures available under U.S. law that will address “any trade-distorting policies” within 60 days of the USMCA entering into force.

Lighthizer also said he will hold meetings in Florida and Georgia “to hear firsthand from U.S. seasonal and perishable producers on trade distorting policies.”

While his letter did not specifically mention Mexico, the country is by far the top foreign competitor to both states’ farmers.

De la Mora argues that restrictions on seasonal produce would run counter to World Trade Organization rules as well as the newly inked USMCA.

The CNA’s de la Vega said major U.S. exports like yellow corn, wheat and pork could be retaliated against if U.S. officials were to target Mexican goods.

A threat was made two years ago to slap tariffs on U.S. grains exports, a major input for Mexico’s growing livestock sector, during a bout of trade tensions but ultimately not acted upon.

Reporting by Sharay Angulo; Writing by David Alire Garcia; Editing by Tom Brown and Leslie Adler

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