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Abstract

Florida and Mexico compete vigorously in the U.S. winter market for several vegetables. Florida gained in competitive advantage during 1985/86-1990/91 primarily because of gains in pricing advantage. The cost of producing and marketing vegetables in select terminal markets shows that Florida's advantage increased for tomatoes produced in the Dade County and Palmetto-Ruskin production areas and for cucumbers and squash. Florida's advantage decreased for tomatoes produced in southwest Florida and for bell peppers and eggplant. U.S. import duties generally contribute to Mexico's high marketing costs, which offset the lower cost of producing vegetables in Mexico. Those cost advantages, however, lost significance because of lower gains in productivity caused by decreased investment in technology, higher costs of resources over which the Mexican Government had relinquished control, and lower labor productivity. NAFTA provides for the eventual removal of tariffs between the two countries. Tariffs are generally a small part of the total unit cost of production and marketing for these crops, ranging from 4 percent for squash to 14 percent for cucumbers.

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