Canadian blueberries pose no threat to U.S. growers, embassy tells trade commission

Canadian blueberry growers and embassy officials on Tuesday rejected claims that U.S. growers are being driven out of business by cheap imports north of the border.

At the request of Trade Representative Robert Lighthizer, the United States International Trade Commission is investigating complaints about blueberry imports from several countries, including Mexico, Chile, Peru and Canada.

The argument of Nadia Bourely, Minister Counselor for Economic and Trade Policy at the Canadian Embassy, ​​boiled down to a simple premise: we are not the problem.

“It is very difficult for us to see how blueberry imports, particularly imports from Canada, could have caused any harm to the US blueberry industry,” Bourely said in an online hearing.

Between 2015 and 2019, he said, U.S. imports from Canada grew just 15 percent, while total imports grew nearly 56 percent.

If anything, US producers have benefited from access to the Canadian market, said Bourely, urging commissioners to consider the impact of each country in isolation, rather than grouping them together.

"US and Canadian producers are highly integrated and this integration has worked to the overwhelming benefit of the US industry...the only real increase in trade flows between our countries has been to the north."

Bourely acknowledged an isolated increase in 2019, which he attributed to a single multinational producer moving large quantities of frozen berries from its Canadian storage facilities to those in the United States.

"These were not 'imports' in any economic sense in 2019, but internal movements of a company with operations on both sides of the border, with no sales to customers at the time of their movement," he said.

"As a result, Canadian imports are not only growing appreciably lower, in fact they haven't grown at all."

Canadian berry growers have been bracing for battle since October, when Lighthizer, a longtime champion of President Donald Trump's protectionist instincts, who at the time faced an uphill fight for reelection, indicated that he planned to mobilize the commission.

Lighthizer cited in particular the fact that American farmers spent much of the past year struggling to cope with the economic impact of the COVID-19 pandemic.

Blueberry imports from Mexico appear to be the main concern, especially for southern growers. But Canadian growers have been caught in the bind and farmers in northern states like Oregon and Michigan have pointed them out.

Oregon grower Hugh Eisele has balked at a “rush of imports” from Canada and Peru in recent years, which he said has undermined his businesses to the point that they no longer generate income.

“Our problems are compounded by lower and lower (cost) imports from Canada,” where growers can take advantage of the lower Canadian dollar, Eisele told the hearing.

“Our costs are not too different from our Canadian counterparts, but Canadian exporters can take advantage of exchange rates to sell below market prices and eliminate early and mid-season pricing.”

Rex Schultz, chairman of the Michigan Blueberry Advisory Committee, said shipments from Canada tend to enter the country with no specific buyers already lined up.

“Canadian farmers prioritize cash flow and are willing to ship produce to this market at any price, fresh or frozen,” Schultz said.

"As a result, Canadian fruit, both fresh and frozen, is keeping US prices very low."

Canadian producers who testified later Tuesday disagreed with what they heard in the morning, in particular the idea that their products were being sold at a discount to American buyers.

At Oxford Foods Inc., a producer with operations in Nova Scotia, New Brunswick and Maine, the integration between the two countries is so deep that the border ceases to exist, Chief Executive Officer Milton Wood said.

“Regarding frozen wild blueberries, the US-Canada border is effectively ignored,” Wood said.

“To every customer, for every type of frozen wild blueberry product, we charge exactly the same price for our imports as we do for our US-produced products.”

Canada also encountered several U.S. allies during testimony Tuesday.

Agricultural trade experts and US growers with international operations insisted that imports have helped, not hindered, the domestic market for blueberries in the United States.

Several attributed the price pressure in recent years to the impact of higher domestic production in states like Washington and Michigan, as well as adverse weather in several growing regions of the country.

And others disagreed with the commission's efforts to survey growers about their concerns, noting a response rate of only about 10 percent - a sign, they said, that the industry as a whole is not concerned.

They also noted that while about 98 percent of Canadian blueberry exports go to the US, Canada remains the world's largest importer of US-grown blueberries by a wide margin.

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