Bonior Makes Consumers See Red

Bonior doesn’t like the fact that many American farmers face increased international competition under the North American Free Trade Agreement. Indeed, his trip culminated in a stop at a Florida tomato farm in an area that trip organizers say “Hurricane NAFTA has hit the hardest.”

Perhaps Bonior takes comfort in the fact that, even under NAFTA, Washington can continue to burden consumers with a host of price supports, import quotas and subsidies. Those programs are nothing more than corporate welfare — hidden taxes paid by consumers to support farmers who can’t (or don’t want to) compete in the international marketplace.

Consider tomatoes. Under NAFTA, the United States agreed to drop barriers to trade in agricultural products. Mexico, with an ideal soil and climate for producing tomatoes, began to sell increasing quantities to American consumers. Tomato prices fell, benefiting all consumers.

But not according to Rich Levine, a Florida tomato packer and grower. “NAFTA is on its way to destroying an entire industry,” he says. “It has boosted Mexico’s economy at the expense of U.S. farmers.”

True, people are buying more Mexican tomatoes and fewer Florida tomatoes. There are now fewer than 100 Florida growers, down from about 230 before NAFTA. But is this unfair? The previous import restrictions included, in effect, a mandatory “vegetable tax” that millions of consumers paid to a handful of farmers.

Not only do Americans get cheaper tomatoes under free trade, they get better ones. In the winter, Florida growers harvest tomatoes while they’re still green and ripen them artificially using ethylene gas. According to Consumers for World Trade, a pro-trade consumer advocacy group, Mexican tomatoes taste better and last longer because they are vine ripened.

So, although Florida growers endure some transitory pain, the United States as a whole is better off. The resources used in domestic tomato production are not lost; rather, they are freed for other more productive uses. Florida isn’t the best place to grow tomatoes, so why grow them there?

The miracle of free trade is that all participants benefit under it. As trade barriers fall, exports surge and consumers can buy cheaper, better goods. Both imports and exports benefit the U.S. economy.

Alas, our trade laws too often stifle those benefits. Florida growers fought for — and won — protection against Mexican imports in 1996. The growers accused Mexicans of “dumping” tomatoes (selling them at less than “fair” value) and filed a complaint with the International Trade Commission. They suspended the suit when the U.S. Commerce Department brokered a deal that set a floor price on Mexican tomatoes.

In a meeting on the tomato dispute with his Mexican counterpart, Secretary of Agriculture Dan Glickman issued a statement that “the development of exports of one country should not be aimed at harming to the productive capacity of another, while adhering to the commitments made in NAFTA.” Nonsense. Freer trade encourages people to invest their resources to produce more valuable goods.

The arguments of the Florida growers are even sillier. Carl B. Loop Jr., president of the Florida Farm Bureau Federation and vice president of the American Farm Bureau Federation, said, “Consumers also stand to benefit. Prices at the retail markets will be more stable this season as a result of this agreement.” How kind of farmers to protect consumers from the unstable world of falling prices.

The fact that Florida growers aren’t competitive doesn’t mean they deserve special protection from imports. If anything, they should compensate consumers for years of overpriced tomatoes.

So far, special-interest politics has prevailed over economic sense. Florida Agriculture Commissioner Bob Crawford has called the price floor “a win for Florida growers and a win for Mexican growers.” Unfortunately, that means the rest of us lose.