Border trade skirmish dried up bean trade in El Paso

Louie Gilot, El Paso Times
July 22, 2003

Unbeknownst to many, the United States and Mexico waged a low-key but intense war this year over frijoles, or more precisely, American frijoles.

Unbeknownst to many, the United States and Mexico waged a low-key but intense war this year over frijoles, or more precisely, American frijoles.

It all started in January when the Mexican government closed its northern border to dry beans and led to a bizarre twist in El Paso: U.S. beans could not cross directly from El Paso to Juárez, Mexican officials decided. For part of May, the beans had to take the long way around.

"My customers had to drive the beans 600 miles to Laredo, cross them over to Mexico and drive back to Juárez," said Mike Dipp, the owner of Economy Cash and Carry in Downtown El Paso, which has sold U.S. beans to Mexican resellers since 1958.

Transportation and insurance costs added $5.10 to each $30, 10-pound sack, making the move almost prohibitive for Dipp's customers. Dipp's bean trade came to a halt, but as the weeks went by, customers resigned themselves and transported eight loads of beans through Laredo in May, Dipp said.

On June 1, the Mexican government, pressured by the beans' Mexican resellers, put an end to the policy.

But business hasn't recovered yet: resellers still have loads of expensive beans to resell before they can buy more from Dipp.

"The biggest problem is that they have to pass it on to their costumers," Dipp said. "They're stuck with a pretty high-priced product."

Dry beans is only one of several areas of contention in the agricultural trade with Mexico, whose officials are battling exports of corn products, beef, pork and apples.

"These are very pro-trade commodities. We are the commodities that started NAFTA," said Audrae Erickson, president of the Corn Refiners Association. Erickson has been battling Mexico over a 20 percent tax imposed 19 months ago on high fructose corn syrup, abruptly ending the use of this American-made sweetener in any soda sold in Mexico, and costing U.S. corn growers $2 billion, she said.

C. Parr Rosson, the director of the Center for North American Studies at Texas A&M's Department of Agricultural Economics, said NAFTA's Jan. 1, 2003, deadline that made 75 percent of agricultural trade between the United States, Mexico and Canada duty-free, seems to have panicked some Mexican farmers.

"There is a fear that Mexican agriculture is in decline," Rosson said. "They would like to have NAFTA reconsidered."

Mexican agriculture still employs 20 percent of the country's work force. Rosson said there is no doubt that Mexican agriculture has suffered in sorghum, wheat, cattle, hogs and poultry, although it has benefitted when it comes to fruits and vegetables.

Late last year, Chihuahua farmers, including bean growers, picketed El Paso's international bridges weekly. And in March, Mexican farmers rode their horses into the Mexican Congress in Mexico City, demanding subsidies and safeguards from American dry beans and white corn.

The Mexican government answered the call by devising a still-vague National Farm Accord on April 28.

Out of all these disputes, the bean saga is one of the most intriguing.

Mexico is the U.S. dry bean industry's largest export market, representing $40 million to $110 million annually. Pinto beans, grown in New Mexico and Colorado, for instance, are especially popular.

The Corn Refiners Association, which is keeping an eye on all agricultural trade disputes, said Mexico has delayed the issuance of import permits for beans for the past six years. On January 21, Mexico shut its borders completely.

U.S. Rep. Silvestre Reyes, D-El Paso, intervened by writing letters to U.S. Ambassador to Mexico Tony Garza and Juan Jose Bremer Martino, Mexico's ambassador to the United States.

In a response dated Feb. 10, John Dickson, a chargé d'affairs at the U.S. Embassy, wrote that his office as well as the United States Department of Agriculture were working to resolve the blockage. Dickson reported that the Mexican Ministry of Agriculture, or SAGARPA, expressed concern over a "plague" in the beans and over foreign beans being smuggled as American beans.

"We are looking into reports from trade and other sources that the true reason for this is not phyto-sanitary, nor contraband-related, but rather due to pressure on the government of Mexico from domestic dry bean growers who first would like to market the large holdover stocks they are carrying from last year and the big crop they expect to harvest this year," Dickson wrote.

Almost four months later, on May 23, Mexico again allowed U.S. beans to enter the country.