FAIR TRADE DOESN'T MEAN LIFTING TARIFF ON CITRUS

Publication: Palm Beach Post
Printed: Friday, November 14, 2003
Editorial

Florida's citrus industry finds itself as a pawn in the trade talks that open Monday in Miami. Brazil, already the world's dominant orange juice producer, wants the U.S. market as well. That's all the Florida growers have left. It's up to the Bush administration to preserve it.

Since it costs so much less to grow and process oranges into juice in Brazil than it does in Florida, the U.S. levies a tariff on Brazilian citrus. To get what backers herald as the largest free-trade agreement in history, an agreement that would span 34 nations from Canada to Argentina (except Cuba) and 800 million consumers, Brazil insists that the U.S. eliminate the tariff.

The result would devastate Florida's orange growers, who, unlike their California counterparts, specialize in juice oranges. While Florida growers harvest 50 percent more fruit per acre than growers in Brazil, they can't compete with Brazil's low wages and operating costs. If the tariff goes, say goodbye to an industry that keeps 800,000 acres under cultivation, provides 90,000 jobs and pours $9.1 billion into the Florida economy. Does every trade deal have to have at its heart chasing the lowest wage?

And what would American consumers get in return? Brazil's citrus industry is closely held by a few wealthy landowners. Picture an OPEC of orange juice -- only, this group would be united in its control over supply and price. Benefits to the average Brazilian would be negligible. Free traders say that other Central and South American nations may emerge as competitors. But
Brazil already controls 50 percent of the world's processed oranges. With its nearly unlimited potential to plant more trees, Brazil would be in the strongest position to take over the 35 percent of the industry that Florida would lose.

Look at the price of tomatoes since the North American Free Trade Agreement to see what monopolies do to the price of agricultural commodities. Since the U.S. and Mexico entered into NAFTA in 1992, consumers haven't enjoyed cheaper tomatoes, but the number of tomato growers in Florida has dropped precipitously.

If not lower prices, then what? Defenders say that opening U.S. markets is an act of political and strategic importance because it would stabilize Central and South American fledgling democracies. They say Americans will save in the long run and American exports will flourish in new emerging markets. Those upstanding goals don't make for a fair trade. Brazil is talking about expanding. Florida is talking about surviving.

Citrus is vital not just to Florida's economy but to its image. Florida has been known for orange groves almost since it became a state. Taking the orange trees out of the Sunshine State would be like taking Mickey Mouse out of Disney World. Ed Smoak, a second-generation grower with 3,000 acres in Highlands County, hopes for his business to be passed to a fourth generation. Land values in the state's interior are low, and demand for development doesn't compare with that in coastal communities. "I'm already betting the farm," he said. "I don't know what else to bet."


In Palm Beach County, owners of three citrus groves have lobbied for years for development rights. One grove, Callery-Judge in The Acreage, gave up on juice a decade ago, fearing the inability to compete with Brazil. But the alternative, marketing fresh fruit such as tangerines, doesn't pay, either, defeated by unexpected competition from Spain. Poor prospects would give
landowners another argument for converting fruit trees to suburbia. Phasing out the tariff would make it hard for growers to get loans.

Trade ministers are a long way from completing a deal. They're hung up over the Bush administration's refusal to discuss subsidies for such products as sugar and its determination to open markets to U.S. service and intellectual properties. There's a good chance that the talks will produce nothing. At this point, Florida would be better off.