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Why Ditching NAFTA Could Hurt America's Farmers More Than Mexico's

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Why Ditching NAFTA Could Hurt America's Farmers More Than Mexico's

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Why Ditching NAFTA Could Hurt America's Farmers More Than Mexico's

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KELLY MCEVERS, HOST:

The trade of food between the U.S. and Mexico has exploded over the past 15 years. Mexican fruit and vegetables come here while things like American corn and milk powder go the other way. President Trump has talked about restricting imports from Mexico, but when it comes to food, policies like that could hurt the American companies more than the Mexican ones. NPR's Dan Charles explains why.

DAN CHARLES, BYLINE: Garland Reiter is one of the people behind the rise in imported food from Mexico. His family's been growing strawberries in California for generations, selling them under the name Driscoll's. In the early 1990s, they started growing strawberries and raspberries in Mexico. It let them grow the fruit during seasons of the year when they couldn't do it back home.

GARLAND REITER: Our move really was for year-round product and quality.

CHARLES: Right around that same time, the North American Free Trade Agreement, NAFTA, went into effect. But Reiter says that's just a coincidence.

REITER: To tell you the truth, we pay minimal attention to that.

CHARLES: Lots of U.S. fruit and vegetable growers have set up production in Mexico. They've done it to expand their growing season or to cut costs. Farm workers in Mexico get paid very little compared to workers in the U.S. Garland Reiter says when he got to Mexico and met some Mexicans, he discovered another reason.

REITER: They're farmers, and they want to be farmers. That is their industry.

CHARLES: For all of those reasons, Mexican exports of fruits and vegetables to the U.S. have increased by nine times over the past 25 years to $12 billion a year. People in the industry say most of that increase comes from U.S. companies setting up production in Mexico. Now President Trump has talked about possibly taxing imports from Mexico or renegotiating NAFTA. But as far as Garland Reiter's concerned, that would just force Americans to pay a little more for Mexican fruit.

REITER: If you look at the magnitude of the investment in Mexico, there's no way that that'll come back into California. There's absolutely no way.

CHARLES: He'll keep growing in Mexico partly because it would be hard for Americans to get all their fresh berries anywhere else. But the other side of the trade equation - U.S. exports to Mexico - is different. A lot of the food products that the U.S. ships to Mexico are commodities that Mexico could buy from other places.

JOHN WILSON: Mexico's the No. 1 buyer of U.S. dairy products in the world.

CHARLES: This is John Wilson, senior vice president of Dairy Farmers of America, a cooperative with 14,000 dairy farmer members. The co-op has a plant that receives milk from big dairy farmers in the eastern part of New Mexico and dries it into powder.

WILSON: About 38 million pounds of powder moved from that plant into Mexico last year.

CHARLES: In total, American exports of milk powder to Mexico add up to half a billion dollars a year. That's up more than 10 times from 20 years ago. The U.S. also exports billions of dollars' worth of corn, soybeans, pork. And for these products, NAFTA is really important. It gets those products into Mexico duty free, which makes American commodities just slightly cheaper than the competition, like milk powder from New Zealand.

WILSON: Pennies do matter in the milk business. It's a very competitive business worldwide, and certainly the absence of a tariff can make or break a deal.

CHARLES: Wilson says, we don't know how much it would cost American dairy farmers if Mexico bought less of our milk powder. We don't even like to speculate about that, he says, but it certainly would hurt. Dan Charles, NPR News.

(SOUNDBITE OF THE METERS SONG, "CISSY STRUT")

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