The Avocado Ban Shows the High Cost of Nontariff Protectionism
Last Sunday, US regulators suspended avocado imports from Mexico after a US inspector in Michoacán allegedly “received a threatening message on his official cellphone.”
The US government claims this alleged threat was the catalyst for the ban, since, according to the US embassy, “facilitating the export of Mexican avocados to the U.S. and guaranteeing the safety of our agricultural inspection personnel go hand in hand.” The US has further stated the ban will remain in place “as long as necessary” to ensure the safety of US inspectors.
It might be news to many Americans that the US employs inspectors in Mexico. After all, many Americans still subscribe to an outdated and naïve view of trade relations in which trade is managed primarily through tariffs and goods are simply taxed at the point of entry.
The whole affair of this week’s avocado ban helps illustrate just how much is going on behind the scenes when it comes to imports from Mexico. The fact that a US regulatory agency can unilaterally end imports from Mexico, coupled with the fact that the US maintains a regulatory apparatus there, helps to remind us that there is no such thing as free trade between the US and Mexico, in spite of what protectionists continue to cluelessly insist.
In reality, agricultural products from Mexico are regulated by numerous mandates covering agricultural production. These bureaucratic regulations are governed by US trade law and by agreements built into US-Mexico trade agreements such as the currently in force “NAFTA 2.0,” also known as the US-Mexico-Canada Agreement (USMCA).
Let’s look at some of the ways the US regulatory state has extended itself over Mexican agriculture as well.
For one, the only state in Mexico even approved to export avocados to the United States at all is Michoacán. So, when the US shuts down trade with Michoacán, the entire nation’s avocado production is locked out of the US. Moreover, Mexico is only allowed to export avocados to the US six months out of every year—specifically from October 15 to April 14.
On top of this, a great many regulations govern the production and import of avocados. For instance, t
Article from Mises Wire