BONITA SPRINGS – Matt McGrath must feel like he’s been cursed by a Chinese person.
“May you live in interesting times,” goes the reputed Chinese curse, and as a Washington-based trade lawyer for Florida Citrus Mutual, McGrath can relate.
“As you may have heard, international trade keeps one very busy these days,” McGrath, with the law firm of Barnes, Richardson & Colburn, told the Citrus Mutual board of directors and almost 200 others at its annual meeting Wednesday. “It changes every day.”
Who would have imagined just a short time ago hearing the president of the United States praising the North Korean leader while insulting the Canadian prime minister, he added.
“Canada?” a bemused McGrath said.
But the Great White North finds itself very much at the center of U.S. trade relations as both countries, along with Mexico, are in the midst of negotiations on a new North American Free Trade Agreement. President Donald Trump was elected on a platform of renegotiating NAFTA or withdrawing from the treaty entirely.
Negotiations have stalled, McGrath said, and Trump is trying to pressure both countries to make concessions by imposing 25 percent tariffs on steel imports and a 10 percent tariff on aluminum. The tariff applies to all imported steel and aluminum, not just from those two countries.
“Where we are now is that both Mexico and Canada have proposed retail tariffs that would raise an equal amount of money to the steel and aluminum tariffs,” he added.
Both countries, however, have aimed their tariffs at products produced in states deemed to be politically sensitive, McGrath said. And that includes a 10 percent Canadian tariff on orange juice from Florida, normally a crucial swing state in U.S. presidential elections.
Although OJ sales in Canada have been declining, along with U.S. sales, the country remains the largest export market for Florida juice, he said.
“It’s an important market,” McGrath said.
Trump is considering a counterattack that would levy a new tariff on imported automobiles and car parts, he added. That would severely damage the Canadian economy.
Absent a U.S. withdrawal from NAFTA, which is a possibility, negotiations on a new treaty will likely extend to next year, McGrath said.
“I don’t think it’s going to happen this year. There’s just too much to do,” he added.
A NAFTA withdrawal would damage Florida citrus and domestic OJ consumers, McGrath said.
A withdrawal would re-impose tariffs on Mexican OJ, which have increased as orange production in Florida has declined during the past decade, he said. That tariff is 28 cents per pound solids (a measure of sugar content) on frozen concentrated OJ and 17.5 cents on not-from-concentrate OJ, essentially 17.5 cents per gallon.
“The Florida citrus industry currently imports a significant amount of concentrated OJ from Mexico,” Bob Behr, CEO of Florida’s Natural Growers, a Lake Wales citrus juice manufacturer, told The Ledger after McGrath’s talk. “The ending of NAFTA would significantly increase our costs. Any cost increase borne by the industry would likely be passed onto consumers.”
The board also heard from Craig Regelbrugge, vice president of government relations at the American Nursery and Landscape Association in Washington, that industry’s trade group. Regelbrugge has represented U.S. agriculture in talks on federal immigration law, especially an agricultural guest-worker program known as H-2A.
More than 80 percent of Florida citrus is picked by H-2A workers, said Paul Meador, a board member and owner of a LaBelle harvesting company.
“It is chaotic and changing by the minute,” Regelbrugge said of negotiations over federal immigration reform, including an H-2A reform dubbed H-2C.
It looks like Congress will vote on at least two immigration bills next week, neither of which would be completely acceptable to U.S. agricultural interests, he said. Speaker of the House Paul Ryan has said he might also introduce a compromise bill.
“I don’t know what would happen with either bill. It’s possible both will fail,” Regelbrugge said.
The most troubling part of the bills is that they would put caps on the number of H-2A workers allowed annually in the U.S., he said. The industry favors improvements that maintain the current H-2A law without caps.
“It’s difficult to be optimistic,” Reggelbrugge said.
The Citrus Mutual board elected a new president, Tom Mitchell, a Vero Beach grower and packinghouse official, to a one-year term. He succeeds John Barben, an Avon Park grower, who served for two years.
The board also elected Kevin Koppelman, a regional vice president for eastern Florida, succeeding Mitchell in that post. It also re-elected three other regional vice presidents: Meador, representing the Gulf Coast; Richard Freeman, representing northern Florida; and Kyle Story, a Lake Wales grower, representing Central Florida.
The board met at the three-day Florida Citrus Industry Annual Conference, which Citrus Mutual hosts.