Mexico lifts apple import duty

An import duty that restricted shipments of Washington apples to Mexico — the state's largest export market — has been eliminated, effective Wednesday.

The Mexican government this week announced an end to the 47 percent duty on Red Delicious and Golden Delicious apples from the United States. The duty added about $10 to the cost of a box of apples.

The decision ends years of higher costs for Mexican apple importers buying Washington apples that stretches back to 1996. Since that time, the apple industry has operated either under a duty or a negotiated price agreement that required importers to pay more for a box of American apples.

Mexico imposed the duty based on domestic industry allegations that Washington was selling apples in Mexico below the cost of production.

In October, a review panel under the North American Free Trade Agreement concluded that Mexico had used outdated information in claiming American farmers were "dumping" apples in its market. It directed Mexico to reach a new determination.

The Mexican government concluded late last month that it could not support a finding that dumping had occurred.

Jim Archer, manager of Northwest Fruit Exporters, an industry group that coordinates export programs for apples and cherries, said the removal of the duty will mean a level playing field for all Washington apple shippers.

Some shippers have enjoyed a lesser or no duty under special arrangement with Mexican authorities.

"Across the board, the vast majority of packers and shippers have been penalized by the tariffs. It has been an inequitable situation for the industry at large," Archer said Tuesday.

Others in the industry called the decision a major victory for the Washington apple industry.

Mike Saunders, chair of the NFE apple committee and a partner in Apple King of Yakima, said he anticipates more shippers will be active in the Mexican market.

Mexico has accounted for more than 30 percent of all Washington apple exports over the last three-year period.

Through February of this year, Mexico accounted for 3.4 million boxes of all varieties of Washington apples out of the total of 18 million boxes exported, according to the Yakima Valley Growers-Shippers Association.

For the 2008-09 marketing year, the industry shipped 10.8 million boxes of apples to Mexico out of total overseas sales of 36 million boxes.

Of the total apples shipped, Red Delicious and Golden Delicious accounted for 7.7 million boxes.

Canada is the second-largest export market.

Todd Fryhover, president of the Washington State Apple Commission, which conducts overseas promotion on behalf of the industry, said he expects individual shippers are considering how they will respond to Mexico's new trade policy on apples.

"I think everyone may have a different take on the actual implication. In general, what we are talking about is lifting restrictive duties," Fryhover said. "Any time you do that, it is a benefit to the industry."

Archer said the industry has challenged the duty in Mexican courts and under NAFTA.

"From the beginning, we have never felt the duties were justified or that injury had occurred to Mexican producers," Archer said.