U.S. NAFTA withdrawal would be 'disastrous', says Mexican avocado rep

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U.S. NAFTA withdrawal would be 'disastrous', says Mexican avocado rep

A representative of a major Mexican avocado association has said the industry is 'worried' about the potential consequences of Donald Trump's presidency, and hopes not all campaign promises will come to fruition. avocado_69588181

President-elect Trump has been highly critical of the North American Free Trade Agreement (NAFTA), describing it as "the worst trade deal maybe ever", and has pledged to either renegotiate or withdraw the from the deal.

NAFTA, which incorporates Canada, the U.S. and Mexico, has been of significant benefit to the Mexican avocado industry and has helped to drive exports over recent years.

Speaking to www.freshfruitportal.com, Avocado Producers and Exporting Packers Association of Mexico (APEAM) advisor Ramon Paz was apprehensive about the national election results.

"We are of course worried about the protectionist and anti-Mexican discourse there has been by the President-elect Trump," he said.

"We hope that now he will be governing, the decisions will be different to those that were presented during the campaign. We hope he will be more rational and objective."

Paz did not believe it was likely the U.S. would withdraw entirely from the regional trade agreement, but rather some specific elements would be renegotiated.

"I think that the economies of the U.S., Canada and Mexico are integrated in such a way that it would not be easy to totally cancel an agreement like NAFTA," he said.

"Mexico is one of the U.S.’s major trading partners, we sell them things and we buy lots of things from them, so the consequences of canceling NAFTA would be disastrous for both countries.

"I think they are going to try to renegotiate a couple of aspects that are of most interest for them, and we hope that for the avocado things remain as they are."

Paz highlighted the major role Mexico played in supplying the U.S. avocado market, and said U.S. consumers would face significant price rises if tariffs were imposed on imports.

"For the local production in California, Mexican avocado imports have been very beneficial because they have helped to increase demand by a huge amount. There is no other country that can supply the volumes that Mexico does," he said, adding Mexican avocado exports had been beneficial to the U.S. economy.

Touching on another pillar of the U.S. presidential election, Paz said restrictions on trade would increase immigration levels from the Latin American country.

"Thanks to avocado exports, now there are 70,000 direct jobs in the state of Michoacan, 300,000 indirect jobs, and nearly 18,000 small-holder farmers with less than 5 hectares - people who make an honest living," he said.

"If Mexican avocados imports were restricted, it’s possible it could cause more immigration rather than less."

Trade barriers may also result in Mexico diverting much of its avocado volumes to other regions.

"Mexico has various markets. It’s mainly served the U.S. due to value and proximity, but the Mexican market is very large and we have access to Europe, China, Japan, Canada and South America, so we can sell to other places, but not necessarily at the same price we get in the U.S.," he said.

Another point Paz made was that most of the leading avocado exporters from Mexico had a financial affiliation with U.S. companies, and so any trade limitation by the government would affect the country's investors.

For now, Paz said the industry was paying close attention to the political developments north of the border, and was hoping the sector's benefits in both countries would be recognized.

APEAM has an office in Washington D.C., where a trade specialist and lawyer are in frequent contact with government representatives, according to Paz, and he said the sector also has the fully support of the Mexican authorities.

Photo: www.shutterstock.com


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