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FLORIDA CITRUS MUTUAL 

 NAFTA Statement 



September 20, 1993 



* The NAFTA will result in the reduction of tariffs on frozen concentrated 

 orange juice (FCOJ) and fresh citrus imported from Mexico, over a 10-15 year period. 



* The FCOJ tariff will decline by 50% in the first year for the quota level of 

 juice. Reductions in the over-quota tariff will eventually intersect with the in-quota 

 tariff, and decline to zero by year fifteen. 



* The NAFTA tariff elimination will have a serious adverse effect on the 

 144,000 employees and $7 billion dollar capital investment in Florida citrus. 



* The ITC predicts at least a 17% increase in imports from Mexico. Mexican 

 bearing and non-bearing orange acreage have expanded by approximately one-third 

 over a three year period, with virtually no domestic market. Acreage is already 

 equal to that of Florida. 



* The ITC also predicts job losses and grove reductions, all in Florida, as a 

 result of NAFTA. Citrus trees are not productive until the fourth year after planting, 

 and have a twenty year productive life. 



* Mexican imports will not simply replace other imports. FCOJ is priced as a 

 commodity; all suppliers will be drawn to the lowest common denominator. Brazil, 

 which accounts for 72% of world output, will match the price to maintain its market 

 in the U.S. 



* Because of the severity of the pricing impact and the influence of world 

 supplies, a safeguard mechanism tied solely to volume surges from Mexico is 

 inadequate. There must be a safeguard mechanism which provides a tariff snapback 

 in the event that import prices fall below the minimum breakeven price for twenty 

 consecutive days. 



* Mexico does not incur may of the environmental and health safety 

 regulatory costs incurred by Florida growers. These costs account for 20-30% of 

 Florida grower costs, while Mexican costs are 49% of Florida's costs. There must be a 

 side agreement which provides for a tariff snapback in the event Mexican 

 environmental standards, including agricultural chemical regulations, are not 

 harmonized with U.S. standards. 



