The Trade Battle Behind Your Holiday Apple Pie

The latest victim in a decades-old international trade war is that crimson peace offering gifted to a teacher and the quintessential ingredient of the most American of pies: the apple.

At the end of October, on a Monday, a union of Mexican farmworker activists called El Barzón rode horses and tractors onto the international bridge that joins El Paso, Texas, and Ciudad Juarez. Dressed in jeans and cowboy hats, the farmers threatened to block traffic until the Mexican government spoke with them.

“The countryside is in agony,” one sign read.

The farmers protested many things, like the murder of a former leader (assassinated by the government, they claim), as well as high energy prices. At the heart of their anger was the North American Free Trade Agreement, the 1994 pact that was supposed to boost both the U.S. and Mexican economies. It has done that—Ford recently announced it would invest $2.5 billion in a Mexican car plant; and in the first 10 years of NAFTA, U.S. merchandise imports to Mexico increased 226 percent. But what it has also done is destroy industries and displace millions of jobs on boths sides of the border.

As the world’s economy globalizes, and as countries sign trade agreements (like the new Trans-Pacific Partnership), nations increasingly compete for each other’s consumers. The winners stand to grow their market and make a lot of money. The losers are left with dead industries. Typically, that means people move to new cities to find work, and sometimes they move to new countries. The apple farmers of Chihuahua are beginning to understand this.

NAFTA has pitted farmers in the states of Chihuahua and Washington against one another. They are the two largest apple-growing states in their respective countries, and their apples end up in everything from holiday ciders, to pies, to slices in a child’s brown-bag lunch.

Out of this fight has come an unlikely arbiter, a Mexican man who serves as the unofficial apple ambassador between countries. His name is Leighton Romney, the blue-eyed, light-skinned second cousin of former presidential candidate Mitt Romney (Mitt’s father and his father were first cousins). “Ever since NAFTA was signed,” Romney says in an accent more Texan than Mexican, “if it’s not one thing, it’s another.”

NAFTA’s goal was to make all North America one large market. It did this by removing the tariffs each country placed on imports to give locals the advantage. One result, says Christopher Wilson, deputy director of the Woodrow Wilson Center’s Mexico Institute, was that the smaller farms died out, unable to compete on an international scale. In Mexico, he says, that led to “significant migration away from rural areas and small farms.”

The best example of this is corn. Farmers here were much more mechanized when NAFTA passed, and from 1995 to 2012 the U.S. gave $85.4 billion to farmers just to grow corn. Mexico doesn’t subsidize its farmers like that. As Mexican markets ran awash in U.S. corn, more than 2 million Mexicans left the countryside. In a few years, rural poverty jumped from 37 percent to 52 percent, according to a study by the World Bank. The poor fled to major cities, and many came north to the U.S. From 1990 to 2000, the Mexican immigrant population in the U.S. more than doubled. Not all of that can be directly tied to corn or to NAFTA. But the World Bank reports that part of the rise in rural poverty—which was the No. 1 reason for immigration—could be blamed on ”the sluggish performance of agriculture, stagnant rural wages, and falling real agricultural prices.”

“One of the major complications of this is that if you have a strategy based on opening up competition, then the question becomes, ‘What do you do with the losers?'” Wilson says. “That’s something that Mexico hasn’t been good at—and the U.S. hasn't been good at. No one has.”

The apple conflict has been delayed until now because Mexico called Washington state a cheater. In 1997, Mexico placed a duty on imported apples because it said Washington sold apples under market value (a tactic known as "dumping") in a scheme to grab a larger share of the market. That duty was eventually reversed. But because the U.S. had reneged on a deal to let Mexican truckers transport loads into the U.S., Mexico kept a tariff on 99 products, apples included, until 2010. Then a drought hit northern Mexico. With the tariff finally lifted, Washington exported more apples that year—then even more the next. When finally, in 2013, Mexico had a decent crop, local farmers couldn’t sell their apples at market. “It was all the same,” one Chihuahuan farmer told a journalist with the Food & Environment Reporting Network. “They were full of American apples.”

Farmers and members of El Barzón were furious. In 2014, local papers reported that some $20 million worth of apples rotted. Farmers accused Washington growers of price dumping, once again, and in protest filled the streets of Chihuahua with apples. “Say no to the gringo!” they chanted. “Eat Mexican apples!” An empathetic local paper called American apples ugly, old, and cold. In the end, some farmers like the one quoted above cut their losses by cutting down their trees—unable to afford to maintain them.

“Chihuahua is not a real great area for growing apples,” says Rebecca Lyons, a spokeswoman for the Washington Apple Commission. Washington’s argument, Lyons says, is that Mexico just can’t compete. The $2.5 billion Washington apple industry has better technology, its trees grow more apples, and it can refrigerate the harvest to sell when market price is best. The dumping claims are lies, she said, and the reason Mexican apple growers couldn’t sell at market last year is because they overpicked. “They just put everything in a box that was on a tree.” Still, she adds, the Mexican apple market is “big enough for everyone.”

The apple dispute with Washington is part of what El Barzón was protesting when it blocked the international bridge from Ciudad Juarez to El Paso. The farmers and their horses remained on the bridge for an hour, then under pressure from federal police, they agreed to leave. It was the dying pangs of an industry.

The rural Mexican town where Romney lives is surrounded by fields of orchards. His packing company, Grupo Paquimé, imports apples and pears, plums and apricots. When his secretary answers the phone, she calls Romney “Mexico’s apple man.” Last year, the U.S. Apple Association invited him to speak at its conference in Chicago.

In all the turmoil, Romney has remained relatively neutral, which gives him a unique vantage in the apple battle. NAFTA deserves a lot of blame, he says. It assumed that Mexico and the U.S. were on a level playing field, but because of farm subsidies and America’s general wealth, Mexican apple growers are having an impossible time catching up. Still, NAFTA hasn’t been a total loss for Mexico, he adds. Mexico cornered the market on cheap labor because in 1995, right after NAFTA, the American minimum wage was $4.25 an hour (now $7.25), while the Mexican minimum was $2.70 a day (now $4.25). Later, a lot of low-skill manufacturing eventually moved to Asia, where labor is even cheaper. But the auto industry seems to have stuck around Mexico, and the new Ford plants will bring the country 3,800 jobs. “You have to compete with the other country with the best thing that you do,” Romney says.

As for Mexican apple growers, “It’s easy to turn around and a blame another country,” Romney says, “But the reality is we need more infrastructure.” The government needs to help farmers invest in better refrigeration technology and higher-yielding trees, or to help them compete somehow, like the U.S. does with many of its farmers, he says. Even so, Romney expects Mexico’s apple industry to run a similar course to what happened with corn. A lot of the smaller operations will die, he says, leaving behind “a handful of growers.”

In a warning of what’s to come, two years ago a Chihuahuan newspaper headline read, “The collapse of state production: U.S. fruit invades the market, 50,000 jobs at risk.” This year, U.S. apple imports to Mexico increased 42 percent. The president of a local apple organization said it amounted to Mexico’s “largest losses ever.”

If, or when, the Mexican apple industry crashes, all those people it supports will need new jobs. Meanwhile, forklifts in Washington this fall readied boxes of Red Delicious apples for export, most handpicked by Mexican laborers in Yakima County, home to a growing Latino population.