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Trump's NAFTA threat angers Christmas tree growers

Daniel Flatley and Eric Martin, Bloomberg News on

Published in Business News

WASHINGTON -- In the cheerless days of the last recession, as Americans were spending less on Christmas trees, Oregon's evergreen growers spotted an opportunity.

Demand had been growing for Northwest-grown firs in Mexico and the U.S. had a surplus. Agricultural officials from both countries forged a relationship that nearly doubled U.S. tree exports over four years, to $22.6 million in 2015. One in six of the state's Christmas trees are now trucked south of the border.

Now, state officials are worried that their gains could become a casualty of President Donald Trump's decision to reopen the North American Free Trade Agreement. If the U.S. ends up withdrawing from the agreement, as Trump has threatened, it could result in Mexico imposing a retaliatory tariff on the U.S. and pivoting to Canadian suppliers.

"The administration does not understand the importance of U.S. agricultural exports and is putting billions of dollars of export sales at risk, unnecessarily," said Tim O'Connor, executive director of the National Christmas Tree Association. Withdrawing from NAFTA "would be devastating to U.S. agriculture and the U.S. economy."

Helmuth Rogg, the Oregon Department of Agriculture official instrumental in building the relationship with Mexico, said withdrawing from NAFTA would undo years of hard work. The state is now Mexico's largest supplier of Christmas trees.

"The risk of getting rejected at the border and losing the trees and then a 20 percent tariff, I don't think that would work for our growers," he said.

 

The Trump administration is pushing for changes to NAFTA, which was established by the U.S., Mexico and Canada 1994 and now governs $1 trillion a year in commerce. Business groups such as the U.S. Chamber of Commerce have opposed key U.S. proposals, such as one to raise regional content requirements for cars and a reported demand for the deal to expire after five years unless the countries agree to extend it.

But farm groups, while largely supportive of Trump, have tried to prevent the U.S. from leaving NAFTA and made the case for other free trade agreements, such as the Trans-Pacific Partnership. In one of his first acts as president, Trump pulled the U.S. out of that agreement.

"The industry really needs these kind of trade agreements -- TPP and NAFTA -- to keep these markets moving," said Chris Aldrich of Natives Northwest Company, a wholesale vendor of Christmas trees in Washington state.

If NAFTA is scuttled, it would leave each country to set tariffs on imports. That's what has the tree farmers anxious.

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