A mini trade mission to the border last week had a U.S.-Canada slant, but discussions focused on the integral role Mexico plays in this hemisphere as designed by the North American Free Trade Agreement.
James Villenueve, Canadian consul general in Los Angeles, whose jurisdiction includes Arizona, and Nadia Scipio del Campo, who works in foreign policy and diplomacy, joined Robert Glenn Williamson, honorary consul for Canada in Arizona during a meeting on Friday, Oct. 24, at the Fresh Produce Association of the Americas (FPAA) headquarters in Nogales.
Villenueve provided an ideal “NAFTA example” of how the three countries are intertwined economically. Bombardier, Inc. is a Canadian aerospace company that designs aircraft components in its office in Montreal, has them built in Mexico, shipped to Wichita, Kan., for final assembly and then sold worldwide.
Canada plays an important role in Arizona’s economy as well, including $3.7 billion in bilateral trade with the state, impacting 128,750 Arizona jobs. Approximately 300 Canadian companies operate in Arizona, including, Star Produce Group which has distribution centers in Winnipeg, Manitoba, Saskatoon, Saskatchewan and Vancouver, B.C., with sales topping $250 million.
Nova Produce, U.S. subsidiary of Star Produce, has been in Nogales for 25 years, said company representative Ernesto Maldonado. His company imports, among other things, tomatoes, cucumbers, bell peppers, limes and grapes from Mexico during the winter. He said 60 to 70 percent of what his firm trades comes from Mexico.
Maldonado said that shipments are relatively seamless from Mexico, through the United States and into Canada, but FPAA chairman Lance Jungmeyer noted there is a glitch in the supply chain involving product testing by the U.S. Food and Drug Administration when a microbial presence is detected.
“They take a sample here then they put it in a bag and send it to where they are in California or Colorado. It is then put into a petri dish, it’s grown. Sometimes that takes more than the three to five days it should take. Unfortunately I have to report that it takes 15, sometimes 20 days and at that point your tomatoes are tomato soup,” Jungmeyer said.
Allison Moore, the FPAA’s director of legislative and regulatory affairs, said the organization is also working with U.S. Department of Agriculture to “harmonize” their hours of operation with those at the ports of entry, a likely issue for Canadian shippers as well.
“If you cross something at six o’clock at night, USDA is home cooking dinner, watching TV and putting their feet up and we’re all still working,” Moore said. “So if they find that shipment (after hours) they aren’t going to look at it until the next day, maybe mid-day the next day. But you’ve already lost a day.
“When we’re talking about (trading) perishable goods between our countries, FDA shouldn’t be a hiccup because they leave work at 4:30 p.m.”
Jungmeyer also noted a “trade friction area.” In the United States, the Perishable Agricultural Commodities Act (PACA) essentially establishes a trust and gives preference during collection procedures to produce companies dealing with buyers who go bankrupt. Until recently, Canadian companies enjoyed the same benefit.
Efforts to get Canada to establish similar protections have been futile. “Push finally came to shove recently and the United State basically said we are not going to allow Canadian companies to be free riders on the system if there is not a reciprocal deal in Canada,” he said.
“It affects things locally here too considering the amount of produce that goes into Canada,” Jungmeyer said. “We would like the Canadian government to establish a ‘PACA-like trust.”
Christopher Teal, the new U.S. consul general in Nogales, Sonora, who has listed supporting economic integration as a top priority, was on hand as was his counterpart Jaime Paz y Puente. Also in attendance was Guadalupe Ramirez, port director in Nogales for U.S. Customs and Border Protection and Richard Rubin of Javid Industries. Rubin’s company oversees the operations of 21 companies and 1,600 employees through Javid de Mexico, a shelter company which provides on-site management services as an alternative for companies seeking to set up Mexican subsidiaries.
The Oct. 24 meeting and a subsequent port tour was coordinated by Bruce Bracker, chairman of the Greater Nogales Santa Cruz County Port Authority.
“It is amazing the amount of border trade and how much that benefits all three countries,” said Villaneuve, noting that trilateral trade totals about $730 million a year, or about $1 million of goods per minute.