West Mexico: Trade Deals are No Problemo

On the Horizon

Changes Affecting the West Mexico Deal Yield Both Fair and Foul Climates

As the West Mexico deal expands in volume and importance, so to do the related issues surrounding it in both logistics and policy. The expansion of West Mexico’s volume necessitated an increasing ability of its U.S. partners to handle the products.

“Nogales continues to work diligently to make crossings even more efficient,” says Allison Moore, director of legislative and regulatory affairs for the Fresh Produce Association of the Americas (FPAA) in Nogales, AZ. “With infrastructure projects in the works, the Unified Cargo Processing Program operating and continued improvements in technology, we can only predict higher volumes and values in the future.”

Alfonso Cano, produce director at Northgate Gonzalez Markets in Anaheim, CA, notes other border crossing options will contribute to the future evolution of the deal. “The continued influence of Texas in the whole scheme of moving product is a factor,” he says. “Texas entry opens more options for retailers who want to source more from Mexico. Having more border crossing points gives us more options and more flexibility.”

The current regulatory and trade environment is also poised to add difficulty to the business. Scott Vandervoet, sales at Vandervoet and Associates in Nogales, AZ, believes the implementation of the various facets of the FDA’s Food Safety Modernization Act (FSMA) will be felt strongly by the importing community in Nogales and their suppliers. “Suppliers in Mexico and distributors/importers in Nogales will have to adjust their record-keeping process so as to ensure compliance with these federal regulations as they come online,” he says.

The biggest black cloud on the near horizon remains the impending NAFTA renegotiation.

“While the deal has helped trade within the NAFTA countries quadruple, much of the rhetoric surrounding the deal casually omits the benefits accrued by all three nations,” says Matt Mandel, vice president of operations for SunFed in Rio Rico, AZ. “While I hope much of the agricultural provisions will remain largely untouched, certain changes being discussed could lead to drastic changes in availability in the marketplace. Any manipulation of supply will lead to higher prices for consumers, and no one wants that.”

Christopher Ciruli, chief operating officer at Ciruli Brothers in Rio Rico, AZ, echoes the most crucial concern right now is the ongoing NAFTA negotiations. “Until they settle, we won’t know what challenges will come our way, since Mexico is such an important trading partner in our industry,” he says.

Any changes resulting in tariffs will yield a tough situation, cautions Miguel “Mikee” Suarez, sales at MAS Melons & Grapes in Rio Rico, AZ. “Buyers and sellers will have to find a way to confront this,” he says. “NAFTA has been a great tool for predictability for buyers and availability for consumers, and both are important to a stable marketplace.”