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[Congressional Record Volume 141, Number 79 (Friday, May 12, 1995)]
[Extensions of Remarks]
[Page E1024]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                    DEVALUATION OF THE MEXICAN PESO

                                 ______

                          HON. MARK ADAM FOLEY

                               of florida

                    in the house of representatives

                          Friday, May 12, 1995
  Mr. FOLEY. Mr. Speaker, today I am introducing legislation to 
alleviate the dislocation of a specific sector of the Florida economy 
due to the devaluation of the peso. While this legislation is designed 
only to relieve the problems experienced by the winter tomato industry 
in south Florida, it is my belief that the underlying intent of the 
legislation should be considered to be applied to all areas of trade 
within the North American Free-Trade Agreement [NAFTA].
  Let me outline some ideas about NAFTA preamble of the agreement--the 
governments of the United States, Canada, and Mexico resolved to: 
First, create an expanded and secure market for the goods and services 
produced in their territories; second, reduce distortions to trade; 
third, ensure a predictable commercial framework for business planning 
and investment; and fourth, promote sustainable development.
  And finally, the second objective of NAFTA is to: ``Promote 
conditions of fair competition in the free trade area.''
  When the Mexican peso underwent the devaluation beginning in December 
1994--these objectives were tossed out the window. The administration's 
only response was a multi-billion-dollar bailout of the Mexican 
currency with American taxpayer dollars. However what the 
administration failed to address was the impact of this devaluation of 
the peso on our vitally important domestic industries. Nobody knows for 
certain about the overall effect, but let me outline the effect on an 
industry that is important to my home State of Florida.
  Florida's tomato industry generates an estimated $650 million in 
economic activity, and employs more than 2,000 workers. However, over 
the past 2 years, Mexico's share of the United States winter tomato 
market has nearly doubled. A devaluation of the Mexican currency has 
caused a massive export of Mexican tomatoes to the United States 
markets where a stronger, more stable currency is the real objective.
  During the winter season, Florida produces about 95 percent of the 
fresh market tomatoes grown in the United States, with the only 
competition coming from Mexico. As the attached chart shows, the volume 
of Mexican tomato imports has dramatically increased over the past year 
due to the devaluation of the peso.
  How has this affected the bottom line of tomato producers in Florida? 
They have seen the prices for their tomatoes decline from $15 for a 25 
pound carton to only $5 from the period of January 30 to February 15 of 
this year. This steady decline in prices can clearly be attributable 
for the search for stable U.S. dollars.
  Mr. Speaker, it is my believe that the recent peso devaluation 
undermines the bases for the establishment of tariffs and more than 
eclipses the tariffs negotiated to help transition the Florida tomato 
industry into a free trade agreement during the 10-year phase out 
period for tomatoes.
  Therefore, today I am introducing legislation to link the tariff of 
tomatoes to the devaluation of the Mexican peso. This is a simple 
solution that would multiply the tariff on tomatoes by an equal 
percentage of the peso devaluation thereby establishing a fair and 
stable climate for trade between Mexico and the United States.
  Furthermore, this legislation directs the Secretary of Agriculture to 
determine the nature and extent of harm done to the domestic industry 
and take actions to remedy such harm. Mr. Speaker, in 1990, there were 
230 tomato growers in Florida, today, there are less than 100 with the 
threat of dumping from Mexico occurring every year.
  Finally, this legislation takes steps to ensure that Mexican tomatoes 
entering the United States meet the same standards established by the 
United States Department of Agriculture for domestic tomatoes. The 
Department has been far too lax in allowing in Mexican tomatoes which 
do not meet the same United States standards.
  While some may argue that this legislation will violate the NAFTA, I 
dispute this most vehemently. NAFTA was to establish clear and stable 
rules of trade between the United States and Mexico. This legislation 
would ensure that to be the case by reducing any distortions to trade 
due to the devaluation of the peso. I urge my colleagues to carefully 
examine the impact of the devaluation of the peso on all industries 
around the country and determine if this would be a workable solution 
for other sectors of the economy.

FLORIDA VEGETABLE REPORT FEDERAL-STATE MARKET NEWS USDA AND FDACS TOMATO
                      SHIPMENTS 1993-94 AND 1994-95                     
                          [1,000 25-lb Cartons]                         
------------------------------------------------------------------------
                       1994-95                              1993-94     
   Shipments    --------------------    Shipments    -------------------
    through       Florida   Mexico       through       Florida   Mexico 
------------------------------------------------------------------------
1/29/95........    12,942    11,635  1/30/94........    16,374    11,061
1/30/95........        75       292  1/31/94........       172       271
1/31/95........        97       292  2/01/94........       232       195
2/01/95........       143       352  2/02/94........       242       245
2/02/95........       132       346  2/03/94........       206       206
2/03/95........        95       336  2/04/94........       142       193
2/04/95........        93       339  2/05/94........       242       223
2/05/95........        48         6  2/06/94........       104         6
                --------------------                 -------------------
    Total......    13,625    13,598  ...............    17,714    12,400
                ====================                 ===================
2/06/95........        84       423  2/07/94........       162       220
2/07/95........       164       384  2/08/94........       326       258
2/08/95........       154       420  2/09/94........       282       308
2/09/95........        94       448  2/10/94........       234       268
2/10/95........       134       525  2/11/94........       218       273
2/11/95........       108       609  2/12/94........       284       268
2/12/95........        49         8  2/13/94........       129         2
                --------------------                 -------------------
    Total......    14,412    16,415  ...............    19,349    13,997
2/13/95........        76       768  2/14/94........       179       378
                --------------------                 -------------------
    Total......    14,488    17,183  ...............    19,528    14,375
------------------------------------------------------------------------

                                                                

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