Good Fruit Grower

January 2017

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16 JANUARY 1, 2017 GOOD FRUIT GROWER Focus for the year ahead is keeping current markets open while the U.S. tree fruit industry awaits the president-elect's actions on trade. by Shannon Dininny U ncertainty may be the best word to describe the economic outlook for the fruit industry when it comes to trade in 2017. The United States is the top global agri- cultural exporter, yet for industry groups that lobby on behalf of fruit growers, the focus heading into the new year will be understanding the positions and sought-after policies of President-elect Donald Trump. Generally, most of the tree fruit industry supports free trade. Trade was one of the cornerstones of Trump's candidacy, and his campaign rhetoric in support of more protectionist trade policies run counter to the free trade agenda of recent U.S. administrations. President Barack Obama had negotiated the proposed Trans-Pacific Partnership with 11 Pacific Rim partners, who together with the U.S. represent 40 percent of the global economy. Under the deal, tariffs on U.S. apples, pears and cherries would have been gradually phased out in Japan, Malaysia and Vietnam; tariffs in the eight other countries are already at zero. TPP effectively died in Congress last November, following Donald Trump's election as president. The White House has broad powers over trade policy, and while the Trump administration won't be able to act unilaterally, the president-elect has repeatedly pointed to an end in U.S. participation in the deal. Trump has also announced support for renegotiating terms of the North American Free Trade Agreement, or NAFTA. Canada and Mexico are the largest export markets for U.S. apples and pears — 46 percent of U.S. apple exports and 70 percent of U.S. pear exports go to those two countries — and Canada remains the largest export market for U.S. cher- ries as well. "We'd hate to see a repeal of NAFTA if President Trump potentially gets his way. That would be a disas- ter for our industry," Washington Apple Commission President Todd Fryhover said. However, Trump's policies aren't the only areas for review in the year ahead. Drilling down into specific crops and markets highlights areas demanding industry attention. The Asia question China has proposed setting up its own, rival version of the TPP, and if the U.S. fails to move forward on a trade agreement with those Pacific Rim nations, U.S. influence would be greatly weakened in Asia, said Des O'Rourke, world market analyst and director of Belrose Inc. in Pullman, Washington, publisher of the monthly World Apple Report. While the U.S. has always stood for free movement of goods, reducing barriers, no protection of state industries, China has the opposite approach, he said. The country has no qualms about playing games with trade, and most Asian countries are terrified to go against China. "The negotiating power is slipping away from the United States," O'Rourke said. "Twenty years ago, we were in the driver's seat in terms of getting free trade agreements that fit our philosophy of how trade ought to operate. For various reasons, that has escaped us." That being said, China shows potential for U.S. exports. Apple growers acquired more access recently, Trade questions lingering 2017 Outlook For any questions please visit our website at or call us at (317) 539-4067. The knip-boom process takes time, so orders must be placed 2 years in advance. J F M A M J J A S O N D J F M A M J J A S O N D

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