produce Archives - 91ֱ /tag/produce/ Business is our Beat Thu, 20 Aug 2020 23:19:38 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 /wp-content/uploads/2019/01/cropped-Icon-Full-Color-Blue-BG@2x-32x32.png produce Archives - 91ֱ /tag/produce/ 32 32 Arizona Congressional delegation calls for “free, fair, and reciprocal” trade with Mexico /2020/08/21/arizona-congressional-delegation-calls-for-free-fair-and-reciprocal-trade-with-mexico/?utm_source=rss&utm_medium=rss&utm_campaign=arizona-congressional-delegation-calls-for-free-fair-and-reciprocal-trade-with-mexico /2020/08/21/arizona-congressional-delegation-calls-for-free-fair-and-reciprocal-trade-with-mexico/#respond Fri, 21 Aug 2020 17:00:00 +0000 https://chamberbusnews.wpengine.com/?p=14038 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 […]

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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 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 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.

Courtesy of the Eller School of Management at the University of Arizona

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, 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 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.

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 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 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 , “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.

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Conflicts over aluminum, fresh produce threaten Arizona, U.S. trade /2020/08/20/conflicts-over-aluminum-fresh-produce-threaten-arizona-u-s-trade/?utm_source=rss&utm_medium=rss&utm_campaign=conflicts-over-aluminum-fresh-produce-threaten-arizona-u-s-trade /2020/08/20/conflicts-over-aluminum-fresh-produce-threaten-arizona-u-s-trade/#respond Thu, 20 Aug 2020 17:00:00 +0000 https://chamberbusnews.wpengine.com/?p=14032 American consumers and industries could face price hikes on fresh produce and aluminum products as trade conflicts with Arizona’s top two trading partners heat up.  Just weeks after the new “tariff-free” United States-Mexico-Canada Agreement (USMCA) went into effect July 1, President Donald Trump announced he was reimposing a punishing 10 percent tariff on Canadian aluminum. […]

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American consumers and industries could face price hikes on fresh produce and aluminum products as trade conflicts with Arizona’s top two trading partners heat up. 

Just weeks after the new “tariff-free” United States-Mexico-Canada Agreement (USMCA) went into effect July 1, President Donald Trump announced he was reimposing a punishing 10 percent tariff on Canadian aluminum. Canada retaliated in kind the following day.

Meanwhile, a domestic trade dispute over fresh produce from Mexico is threatening to stir up a new round of tariff battles as well.  

Both measures could disrupt relations with Arizona’s top two trading partners, Mexico and Canada, during a time when many Americans are faced with financial hardships due to COVID-19 shutdowns, opponents said. 

“Tariffs are taxes, plain and simple,” said Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry. “As trade partners with Canada and Mexico, we see every day how Arizona benefits from these relationships.

“Efforts should be focused on expanding market access for American manufacturers and growing economic opportunities with our closest partners to lead to a greater variety of goods and price competition for U.S. consumers.”

Here is a rundown of what’s happening:

U.S. hearings on produce from Mexico alarm industry

Of concern to importers and exporters is a long festering domestic battle over a rarely-used “trade remedy” to affect seasonal produce coming from Mexico like tomatoes, peppers and strawberries. 

For years, farmers in the Southeast have made a number of claims about Mexico, including that government subsidies to agriculture have harmed American farmers who cannot compete with the low price of produce flooding north over the border.

During heated hearings before U.S. trade officials last week, representatives from states like Florida called for the seasonality rule — known as Section 301 — to be enforced to improve the domestic competitiveness of American farmers.

Representatives of Southeast agriculture testified that Mexican tomatoes and other produce are being sold well below fair market prices — a practice known as dumping — which it’s creating “unfair” challenges for growers to compete.

But opponents dispute those claims and have the research to prove it, said the Fresh Produce Association of the Americas (FPAA), which is headquartered in Nogales, Arizona. 

A recent analysis by the University of Arizona, for example, shows that since 1995, the U.S. has used up to 41 percent of its allowable subsidies while Mexico has averaged just 2 percent, the FPAA said last week. Also, the analysis did not include the $28 billion in aid to U.S. farmers to compensate them for the financial harm caused by trade  disputes with foreign trading partners last year. 

The so-called trade “remedy” would hurt American pocketbooks by instigating costly new tariffs on Mexican imports, the FPAA said. 

“Consumers would pay more for strawberries, blueberries, bell peppers, tomatoes, sweet corn and watermelon if tariffs or quotas are put on these items through a 301 trade action as requested today by the Florida Fruit & Vegetable Association,” the FPAA stated in a that countered the “rhetorical” claims one by one.  

Action could instigate another tariff war with Mexico 

Imposing the action potentially could instigate “numerous and unending tit-for-tat trade wars” with Mexico just weeks after the USMCA went into effect, the FPAA said.

That could imperil $40 billion in U.S. agricultural exports to Mexico and push up the cost of fresh produce from Mexico, said the FPAA, which represents 120 U.S. member companies involved in importing and marketing fresh fruits and vegetables grown in Mexico and distributed across the U.S. and the world. 

Bipartisan front in Arizona opposes attack on “free trade” 

Arizona’s congressional delegation has stepped in to intervene, calling on the White House to reject the proposal. 

“This trade remedy would affect Arizona’s economy, the U.S. agribusiness supply chain, and consumers all across the country who enjoy a diverse selection of tomatoes at low prices,” said a letter sent by nine Arizona congressional members to the U.S. Trade Representative Robert Lighthizer. 

The letter was signed by Arizona U.S. senators Kyrsten Sinema (D) and Martha McSally (R) and representatives Tom O’Halleran (D), Raúl M. Grijalva (D), Andy Biggs (R), David Schweikert (R), Ruben Gallego (D), Debbie Lesko (R) and Greg Stanton (D). 

“Such a provision would run counter to consumer preferences, undermine the spirit and benefits of free trade, risk reciprocal or retaliatory actions from our trade partners, and harm U.S. industries in order to artificially support a small segment of regional growers’ interests,” the letter said.

Canadian and U.S. aluminum hit with new trade taxes

In another blow to many industries that rely on aluminum, President Trump reimposed tariffs on Canadian aluminum this month. Canadian Prime Minister Justin Trudeau responded the next day with retaliatory tariffs on $2.7 billion worth of U.S. aluminium products. 

During a at the Whirlpool Corporation Manufacturing Plant in Clyde, Ohio August 6, the president said that the tariffs were being reimposed to stop Canadian aluminum producers from flooding the U.S. with exports that will “kill all our aluminum jobs.” 

“Canada was taking advantage of us, as usual, and I signed it…because the aluminum business was being decimated by Canada,” Trump stated. “Very unfair to our jobs and our great aluminum workers.”

“To be a strong nation, America must be a manufacturing nation and not be led by a bunch of fools,” the president said. “That means protecting our national industrial base.”

Industry leaders, U.S. Chamber oppose tariffs

But many aluminum manufacturers and industry advocates said the tariffs will only push up costs for producing items like cars, household appliances and beer cans. 

Calling the tariffs “a step in the wrong direction,” Myron Brilliant, the head of international affairs for the U.S. Chamber of Commerce, issued a opposing the new trade duties. They will raise costs for American manufacturers and draw retaliation against U.S. exports.

“Today more than ever, American businesses of all sizes depend on trade as an engine of growth and job creation,” he said.

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How Nogales makes Thanksgiving /2019/11/25/how-nogales-makes-thanksgiving/?utm_source=rss&utm_medium=rss&utm_campaign=how-nogales-makes-thanksgiving /2019/11/25/how-nogales-makes-thanksgiving/#comments Mon, 25 Nov 2019 18:30:40 +0000 https://chamberbusnews.wpengine.com/?p=12273 Snow has arrived in Arizona’s high country, and parts of the country are already in the grips of a winter chill, but grocery store produce sections across the United States are still full of fresh fruits and vegetables. That’s in large part because of Arizona’s role in facilitating the importation of fresh winter vegetables. Nogales, […]

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Snow has arrived in Arizona’s high country, and parts of the country are already in the grips of a winter chill, but grocery store produce sections across the United States are still full of fresh fruits and vegetables.

That’s in large part because of Arizona’s role in facilitating the importation of fresh winter vegetables.

Nogales, Arizona, is one of the nation’s leading entry points for the importation of Mexican-grown fruits and vegetables, which pass through the Nogales-Mariposa Arizona Port of Entry.

Always a hotspot for fresh Mexican-grown tomatoes, the Mariposa port of entry is also a major gateway for chili and bell peppers, cucumbers, melons, berries and more.

“We’re going to see really good volumes of not only tomatoes but also good volumes of squash and bell peppers,” Lance Jungmeyer, president and CEO of the Fresh Produce Association of the Americas, said of this year’s winter vegetable harvest.

Nogales will also see high-volume importation of produce more typically associated with the summer months.

“Even this time of year, we’re importing watermelons,” Jungmeyer said. “That’s an area where the consumer demand is coming in the form of cut melons.”

Meeting national consumer demand

Nogales is essential to meeting national consumer demand when Mother Nature wreaks havoc on domestic crops.

Thanksgiving shoppers will be thankful about that — they can still buy fresh green beans, despite a cold snap in the southeastern U.S. that affected the supply and quality of green beans from that region for the worse.

“We’re seeing good demand for a lot of produce in Nogales right now,” Jungmeyer said. “The supply we have is good.”

Jungmeyer said he does not anticipate that shoppers will pay more for green beans this holiday, as many retailers have already set and advertised their prices for popular Thanksgiving ingredients.

SR-189 critical to Nogales, state

The uptick in activity at the port means increased truck traffic along State Route 189, also known as Mariposa Road, which connects the port of entry to Interstate 19, the north-south corridor between Nogales and Tucson.

SR-189 is slated for a significant upgrade, thanks to funds designated by the state Legislature and the Arizona Department of Transportation to fast-track work on the trade route.

Jungmeyer said Nogales could be on the brink of breaking its previous record for commercial truckloads this year.

“We’re definitely very thankful to Gov. Ducey and the Legislature for the funds that they appropriated towards this SR-189 project,” he said. “It’s going to be a big deal not only for Nogales, but really for the whole state.”

Warehouse space hard to come by

Before the fruits and vegetables that enter Nogales are distributed throughout the nation, they stop at one of the climate-controlled warehouses near the port of entry. That warehouse space is becoming increasingly hard to come by, however.

“This season, warehouse space is going to be at a premium,” Jungmeyer said.

Due to new federally mandated inspection requirements for Mexican tomatoes, warehouses will be forced to hold shipments longer while they await inspection; palates usually packed close together will have to be arranged further apart in order for inspectors to maneuver around them, taking up valuable space, Jungmeyer said.

Despite logistical and infrastructure-related challenges, Jungmeyer said optimism remains high for a successful winter season and another in the spring, which is likely to be even busier.

“We used to operate like a bell curve, but now we have two peaks,” Jungmeyer said. “So, starting in December through the end of February, it’ll grow like a bell curve peak and then it’ll drop off a little bit. And then, in late March through the end of June, we’ll have another peak, and that peak is even stronger than what we call the winter peak.”

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Arizona congressional delegation advocates duty-free importation of Mexican tomatoes /2019/10/31/arizona-congressional-delegation-advocates-duty-free-importation-of-mexican-tomatoes/?utm_source=rss&utm_medium=rss&utm_campaign=arizona-congressional-delegation-advocates-duty-free-importation-of-mexican-tomatoes /2019/10/31/arizona-congressional-delegation-advocates-duty-free-importation-of-mexican-tomatoes/#respond Thu, 31 Oct 2019 18:15:30 +0000 https://chamberbusnews.wpengine.com/?p=11930 The Arizona congressional delegation is once again working to ensure that fresh tomatoes from Mexico can be imported into the United States duty-free. U.S. Sens. Kyrsten Sinema and Martha McSally and U.S. Reps. David Schweikert, R-Fountain Hills, and Tom O’Halleran, D-Casa Grande, sent a letter to U.S. International Trade Commission Secretary Lisa Barton underscoring the […]

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The Arizona congressional delegation is once again working to ensure that fresh tomatoes from Mexico can be imported into the United States duty-free.

U.S. Sens. Kyrsten Sinema and Martha McSally and U.S. Reps. David Schweikert, R-Fountain Hills, and Tom O’Halleran, D-Casa Grande, sent a to U.S. International Trade Commission Secretary Lisa Barton underscoring the importance of international produce trade to Arizona’s economy.

The USITC is in its final phase of an investigation determining whether the U.S. produce industry is at risk due to Mexican imports of fresh tomatoes.

Earlier this month, the Florida Tomato Exchange (FTE) filed a request to continue that , just a month after the U.S. Department of Commerce signed a new suspension agreement with the Mexican tomato industry ensuring tomato imports remain duty-free.

Now, Arizona’s representatives are stepping up to keep the cross-border produce trade duty-free.

“As the Commission continues the final phase of its to determine whether a U.S. industry was materially injured or is threatened with material injury by reason of imports of fresh tomatoes from Mexico, we respectfully urge that you consider the interests of American consumers and Arizona workers in making any determination,” the representatives said in the letter to the USITC.

“Imported tomatoes give consumers choices and access to a higher quality and greater variety of produce,” the letter continues. “Our trade relationship with Mexico is also an economic driver for our state, region, and country.”

McSally has introduced an amendment to a spending bill for the Commerce, Justice and State departments to prevent the antidumping investigation from proceeding.

“None of the funds appropriated by this Act or any other Act may be used for the purpose of enforcing a suspension agreement, continuing an antidumping duty investigation or enforcing an antidumping duty order related to fresh tomatoes from Mexico,” the amendment reads.

Arizona is one of the country’s leading entry points for fresh produce from Mexico.

“Trade in tomatoes from Mexico supports around 33,000 American jobs and contributes millions of dollars to the economy of Arizona. I will continue to fight on behalf of Arizonansfor duty-free trade in tomatoes,” McSally said.

A referenced in the letter to the USITC confirmed McSally’s jobs number claim and revealed that supply chains derived from Mexican tomato imports account for nearly $3 billion in U.S. gross domestic product.

“We will continue working to protect Arizona jobs from unnecessary trade restrictions,” Sinema said in a .

Sinema was instrumental in the successful negotiation of the new suspension agreement.

“Arizona’s relationship with neighbor Mexico supports thousands of jobs across the state and is a driver of our economic growth,” Schweikert said in a . “I am pleased to see the Arizona delegation stay consistent in working together to protect our cross-border trading relationships and Arizona jobs from harmful trade restrictions.”

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Florida tomato growers request continuation of antidumping investigation with Mexican producers /2019/10/23/florida-tomato-growers-request-continuation-of-antidumping-investigation-with-mexican-producers/?utm_source=rss&utm_medium=rss&utm_campaign=florida-tomato-growers-request-continuation-of-antidumping-investigation-with-mexican-producers /2019/10/23/florida-tomato-growers-request-continuation-of-antidumping-investigation-with-mexican-producers/#respond Wed, 23 Oct 2019 17:00:27 +0000 https://chamberbusnews.wpengine.com/?p=11804 The Florida Tomato Exchange filed a request to continue the antidumping investigation of fresh tomatoes from Mexico. The action to reignite the investigation comes just one month after the United States Department of Commerce signed a new suspension agreement with the Mexican tomato industry. “U.S. trade law, however, permits domestic producers to request continuation of […]

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The Florida Tomato Exchange filed a request to continue the antidumping investigation of fresh tomatoes from Mexico.

The action to reignite the investigation comes just one month after the United States Department of Commerce signed a new suspension agreement with the Mexican tomato industry.

“U.S. trade law, however, permits domestic producers to request continuation of the investigation,” the Florida Tomato Exchange (FTE) wrote in a . “The FTE is taking this action reluctantly. The Department of Commerce did an excellent job under difficult circumstances negotiating the new suspension agreement, which the FTE continues to support.

“Unfortunately, the Mexican tomato industry does not agree and has signaled its intention to challenge the agreement legally and politically, even though they signed the agreement just last month,” the statement said.

The FTE’s decision to request a continuation of the investigation follows an Oct. 3 letter from the Mexican growers associations, CAADES, that “signaled a strong likelihood that they will challenge the new suspension agreement in court.”

After the FTE announcement, the Mexican tomato growers released a statement saying the FTE’s announcement is misleading and mischaracterizing recent events.

“We are surprised by the announcement that the FTE is seeking a continuation of the antidumping investigation that could void the agreement recently reached with the Commerce Department after many months of negotiations,” the Mexican tomato growers said in the .

According to the Mexican tomato growers, the Oct. 3 letter did not signal an intent to either challenge the agreement in court nor renegotiate the agreement. It was simply correcting the characterization of data and “unfounded allegations” put on the record after the agreement was signed.

“The Mexican tomato industry negotiated its agreement with the Commerce Department in good faith and has every intention of abiding with that agreement throughout its term. So long as the agreement is administered in good faith and in accordance with its terms, the Mexican industry has no intention of ever withdrawing,” the Mexican tomato growers continued.

The new suspension agreement will remain in effect during the new investigation. Upon completion, the U.S. Department of Commerce and the International Trade Commission will determine whether or not Mexican tomatoes were dumped in the U.S. and if the dumping harmed the U.S. tomato industry, according to the FTE.

“If both determinations are affirmative, the suspension agreement will remain in place, and duties will not be imposed so long as the agreement is in effect. Alternatively, if there is a negative finding, the proceeding will end, the suspension agreement will be terminated, and there will be free trade,” FTE said in the statement.

“The data show clearly that U.S. producers are not injured or threatened with injury by imports from Mexico. Rather, our growers have done just what good, private companies should do. We have spent billions of dollars over recent years converting our production to greenhouses and other protected agriculture types of production to bring a fresher, vine-ripe tomato to the U.S. market. U.S. consumers have turned to those tomatoes not because they are cheaper, because they are not, but because they are fresher and tastier and simply a better product,” said Rosario Beltran, president of CAADES.

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Arizona-Mexico trade stakeholders meet with state business leaders about border concerns /2019/05/15/arizona-mexico-trade-stakeholders-meet-with-state-business-leaders-about-border-concerns/?utm_source=rss&utm_medium=rss&utm_campaign=arizona-mexico-trade-stakeholders-meet-with-state-business-leaders-about-border-concerns /2019/05/15/arizona-mexico-trade-stakeholders-meet-with-state-business-leaders-about-border-concerns/#respond Wed, 15 May 2019 17:00:04 +0000 https://chamberbusnews.wpengine.com/?p=8951 Government and business representatives from along the Arizona-Mexico border met at the Fresh Produce Association of the Americas in Nogales, Ariz., Friday to discuss commerce-related concerns for the region. “What I really want… is to learn what we need to do specifically — when it comes to Nogales, when it comes to Douglas, when it […]

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Government and business representatives from along the Arizona-Mexico border met at the Fresh Produce Association of the Americas in Nogales, Ariz., Friday to discuss commerce-related concerns for the region.

“What I really want… is to learn what we need to do specifically — when it comes to Nogales, when it comes to Douglas, when it comes to our border communities — to make sure that we’re doing everything possible so that this region can continue to prosper,” said Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry.

“This whole area is an incredibly vibrant community,” Hamer said. “It’s leading the way for the state of Arizona.”

State infrastructure, especially in the border region, has been of prime concern for Arizona Gov. Doug Ducey, said Juan Ciscomani, senior advisor for regional and international affairs at the governor’s office.

“He respects and appreciates this area; that’s why he’s been here quite often,” said Ciscomani, who also serves as vice chair of the Arizona-Mexico Commission (AMC) board.

Ducey included funding in his fiscal year 2020 state budget plan for a cold storage inspection facility on the border in Nogales, he said.

“The relationship overall with Mexico has been a key priority for the governor, and [the AMC has] been saying and demonstrating that for now almost five years,” Ciscomani said.

Guillermo Valencia, chairman of the Greater Nogales and Santa Cruz County Port Authority, started off the discussion by describing the interconnected nature of the Nogales communities on each side of the Arizona-Mexico border.

“As a community, Nogales, Arizona, doesn’t stand by itself,” Valencia said. “Nogales, Sonora, is a very important part of our community.”

“Our students go to school there; your students come to school here,” he said. “We go to church there; they come to church here. They come to our parks here; they come to our stores here. We go to the dentist over there; we go cut our hair over there. There’s a big synergy that goes on between both communities, and we depend a lot on each other.”

Friday’s discussion focused on issues affecting businesses that depend on cross-border trade for success, specifically the produce and manufacturing industries.

The Tomato Suspension Agreement, a between the United States and Mexico that kept tomato supply high and prices low, ended May 7, resulting in a 17.5 percent tariff on tomatoes.

“We’re now facing down duties this week,” said Lance Jungmeyer, president of the Fresh Produce Association of the Americas. “A typical tomato company in Nogales… could be facing $500,000 in cash deposits per week just to stay in business. So, you multiply that over the course of a year, and you can see that it’s very difficult for companies to remain in this business.”

On the other hand, there are new opportunities on the horizon, Jungmeyer said, such as the proposed cold storage inspection facility in the governor’s budget.

“That’s an opportunity to bring in items that we’re not touching at all right now,” Jungmeyer said. “We barely bring in any berries at all, and that’s one of the fastest-growing items out of Mexico. There are other temperature-sensitive items that don’t come to Nogales at all. That’s going to open up a huge opportunity, so it’s a small investment that could pay off for years and years and years, and so that gives us opportunities to promote the corridor and the wait times and system improvements.”

The local port authority in Nogales follows the business community’s lead to determine what the most important challenges are, said Bruce Bracker, vice-chairman of the board for the Greater Nogales-Santa Cruz County Port Authority and supervisor for Santa Cruz County’s third district.

First and foremost, Nogales ports of entry — DeConcini for vehicles and Morley Gate for pedestrians — are extremely shorthanded, leading to long delays crossing the border into the U.S. from Mexico, Bracker said.

“Both of these ports of entry just are not equipped to deal with the needs of today,” Bracker said. “They were built 20, 30 years ago… they’re a floodplain, they don’t have enough passenger vehicle lanes, they don’t have enough pedestrian lanes, and it’s choking our downtown.”

Nogales is losing retail business on both sides of the border because residents don’t want to risk an excessive wait to cross, Bracker said.

“They don’t know what they’re going to get when they walk up to the border — whether it’s going to be a 15-minute crossing, a 20-minute crossing or a two-hour crossing,” he said.

Another issue is that the International Outflow Interceptor (IOI) — the sewer line from Nogales, Sonora, to the Waste Treatment Facility in Rio Rico, Arizona — needs to be upgraded. Misael Cabrera, director of the Arizona Department of Environmental Quality, is to improve the line, Bracker said.

“We’re a great community; we’re a clean community,” he said. “Our air is clean, and our water is great. We just need to make sure that we protect our infrastructure so that it stays that way.”

Issues such as outdated infrastructure and extended wait times at the border impact the region’s economy in both seen and unseen ways, Valencia said.

“There are people that say, ‘I won’t go. I won’t use it… I won’t cross the border,’” Valencia said. “And they eliminate that from their plans, so that hurts.”

Workforce shortages and border wait times are affecting the local manufacturing industry as well, said Joshua Rubin, account manager at Javid, a Nogales, Arizona-based maquiladora founded in 1983.

Mexican maquiladoras are unique to other manufacturers in that they operate under established to lower production costs for U.S. manufacturers. Production equipment can enter Mexico duty-free, and finished products can be exported to the U.S. from Mexico at lower tariffs than from other countries.

“The maquila industry, we’re growing,” Rubin said. The industry is expanding, and Javid is seeing more clients than ever before, he said.

There are about 3,000 vacant jobs in the maquiladora industry now, even with an employment increase of 4,000 employees in the past year, Rubin said. As the industry continues to grow, the need for a larger workforce supply grows, too, he said.

“One of the big things that we’re noticing is that a lot of the U.S. companies are seeing the talent that there is here in Mexico,” Rubin said. “It’s a little bit cheaper to be able to manufacture down here, so we have customers that are sending a lot more of their product line down here.”

One of Javid’s clients is even closing down its Pennsylvania facility in favor of having 100 percent of its operations in Mexico, he said.

“The population growth is at a lower pace than the demand for new employees of the maquiladora industry right now,” said Humberto Ramírez, vice president of Javid. “We do need the regional increase of people coming up from out-of-state to come to the borders to look for better-paying jobs, especially now that the minimum wage at the border line increased to double, and it’s a lot higher than it is in the rest of the country, so we can compete salary-wise with the rest of the country.”

One unintended consequence of Mexico’s near the U.S. border — the result of sweeping economic changes by the country’s current — is that lower-wage jobs are now approaching or even surpassing the wages of entry-level manufacturing jobs, Ramírez said.

“The Oxxos, the supermarkets that were paying way below the industry — because of this minimum wage increase, all of a sudden they were at the same level,” he said. “They’re competing with us, which created a spiral of turnover… so we’re just adapting to those [changes].”

Now, the maquiladoras want to hire migrant workers from other parts of Latin America, Rubin said.

Companies are hiring, and migrants want to work, but it is difficult for migrant workers to obtain work visas because they are often undocumented and do not have the necessary identification, he said. Many migrants also hope to move on to the U.S. rather than stay in Mexico, he said.

The mayor of Nogales, Sonora, is “100 percent in support” of maquiladoras hiring migrants, but the industry — which makes up about 55 percent of the GDP in Nogales, Sonora — needs Mexican immigration services to get involved so workers can obtain visas, he said.

In total, there are about 100 to 120 maquiladoras employing more than 42,000 workers in Nogales, Sonora, Ramírez said.

Kevin Adam, rural transportation liaison for the Rural Transportation Advocacy Council, said infrastructure — statewide and at the border — needs immediate improvement.

“We’re under-investing by more than a billion [dollars] a year statewide, and that is no more evident than at the border,” Adam said. “Douglas has a plan; they need the funding for it to go. San Luis — same thing.”

Adam said he fears the issue will not be addressed until the state sees a noticeable loss of revenue, which could create “tremendous problems” for the border region.

“At the same time, [there is] tremendous opportunity for economic development if in fact you do see the positive changes,” he said. “We need the infrastructure down here to be a selling point for trade; we don’t need to be shooting for minimal standards.”

Adam and Jungmeyer pointed to State Route 189, which will see, as an example of much-needed infrastructure improvement projects.

It took seven years to “cobble together” funding for SR-189, said Gail Lewis, director of the Office of P3 Initiatives and International Affairs at the Arizona Department of Transportation (ADOT).

Luis Pedroza, finance director for the city of Douglas, said his city suffers from many of the same issues as Nogales.

“The city of Douglas, we’re running out of space; we need more space,” Pedroza said. “That’s why we’re asking for a new port of entry. Those are our issues plaguing us.”

Mexico is Arizona’s largest trading partner, with two-way trade of $16.6 billion in 2018, and visitors from Mexico contribute 60 to 70 percent of sales tax revenue in Arizona border communities, the Arizona-Mexico Commission.

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