The potato-shaped loophole in free trade

Key takeaways

The journey of American potatoes to Mexico has been a complex tale of trade regulations, pest concerns, and lobbying.
Pest regulations, legitimate as they may be, can often be used as a shield to protect domestic agriculture from international competition.
The resolution of the potato trade saga demonstrates how lengthy negotiations and diplomacy can eventually lead to favorable outcomes in global trade.
Understanding the intricacies of trade agreements can illuminate the reasons why some goods remain restricted in foreign markets.
The case illustrates that free trade is not a straightforward process and can require years of legal and political combat.

Summary

The Mountain of Potatoes

The episode kicks off with the hosts visiting Brian Wada's immense potato warehouse in Idaho, where they marvel at the sight of 15 million potatoes stacked impossibly high. Brian, a third-generation potato farmer, shares his childhood experiences of sliding down piles of potatoes, juxtaposing the wonder of the hosts with his lifelong familiarity with them.

The Complex Trade Deal Landscape

As the conversation progresses, the hosts delve into the tortuous journey of American potatoes attempting to enter the Mexican market. Since the signing of NAFTA, American farmers have faced significant barriers, particularly the stringent pest regulations and a powerful Mexican potato lobby that has stymied their efforts for over two decades.

The Role of Pest Concerns in Trade Agreements

The episode highlights the intricate technicalities within free trade agreements, emphasizing how pest concerns have been weaponized by countries to protect domestic industries. Matt Lance, an international trade consultant, illustrates how Mexico used pests as a justification to maintain restrictions, despite evidence suggesting minimal risk from American shipments.

Potato Court and Diplomatic Maneuvers

Narratives of negotiations unfold with the introduction of a 'potato court,' which investigated the legitimacy of pest concerns. The ruling favored American farmers, leading to a brief opening of markets, only for the Mexican potato industry to launch new legal battles to halt imports again.

The End of a 26-Year Saga

In a significant diplomatic turn, the podcast recounts how persistent advocacy and negotiations, especially under the new USMCA agreement, led to an eventual resolution in 2022. This allowed American potatoes to finally enter Mexican markets after 26 years of political maneuvering, setting a hopeful tone for future trade.

Show notes

Ever since free trade opened up between the US and Mexico in the 1990s, trillions of dollars of goods have been going back and forth between the two countries, from cars to strawberries to MRI machines to underwear. But one major exception has been fresh American potatoes.

Today on the show, we tell the trade saga of the American potato. For more than 25 years, there was a place that American potatoes could not go to freely. A place that the entire American potato industry was desperate to access. A vast, untapped market: Mexico.

But standing in their way – the Mexican potato lobby and a trade loophole.

This episode was hosted by Erika Beras and Jeff Guo. It was produced by Willa Rubin and edited by Meg Cramer. It was fact-checked by Sierra Juarez. Engineering by Cena Loffredo. Alex Goldmark is Planet Money's executive producer.

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