CASE SPECIFICS 
Case Number: 531
Case Mnemonic: XMASTREE
Case Name: Christmas Tree Trade Dispute
| IDENTIFICATION | LEGAL CLUSTERS | GEOGRAPHIC CLUSTERS | TRADE CLUSTERS | ENVIRONMENT CLUSTERS | OTHER FACTORS |
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I. Identification
U.S. sales of Christmas Trees abroad to Mexico and Japan is growing at a feverish pitch. There has been recent controversy, however, over sales to Mexico and the requirement placed on U.S. firms to shake their trees prior to shipment. Furthermore, U.S. growers contend that the cost of shaking equipment is hampering their ability to compete in Mexican market. U.S. Christmas Trees have been known to carry harbor insects, according to Mexican officials, and they are concerned about intorducing new bugs into the habitat. The story with Japan is quite different. In the island nation, U.S. growers have tapped a relatively unexplored market for one of the unique icons of Western tradition.
Taken together, Japan and Mexico combined spend millions of U.S. dollars on real Christmas Trees last year. U.S. growers hope sales will increase more in the coming years, but the trouble in Mexico 'has 'em shaking their heads.'
While historians place the first Christmas tree in Alsace, in 1521, the custom took centuries to catch on in America. (The Herald--Glasgow. "Tree Trade Puts on Glitter." December 12, 1998. Page 8.) "The first recorded reference to the Christmas tree dates back to the 16th century. In Strasbourg, Germany (now part of France), families both rich and poor decorated fir trees with colored paper, fruits and sweets. The retail Christmas tree lot also dates back that far - in those times, older women would sell trees harvested from nearby forests. The tradition spread through Europe and was brought to the United States by German settlers and by Hessian mercenaries paid to fight in the Revolutionary War. In 1804 U.S. soldiers stationed at Fort Dearborn (now Chicago) hauled trees from surrounding woods to their barracks at Christmas. The popularity of the Christmas tree then proliferated. Charles Minnegrode introduced the custom of decorating trees in Williamsburg, Virginia in 1842. In 1851, Mark Carr hauled two ox sleds loaded with trees from the Catskills to the streets of New York and opened the first retail lot in the United States. Franklin Pierce, our 14th President, brought the Christmas tree tradition to the White House. In 1923, President Calvin Coolidge started the National Christmas Tree Lighting Ceremony now held every year on the White House lawn." (National Christmas Tree Association. Downloaded from http://www.splusnet.com/~carlson/folklore.htm).
"Mexico has emerged as the largest foreign market for U.S. grown Christmas trees. Exports to the United States' NAFTA partner have exploded in recent years." (Journal of Commerce, 11/18/94). Furthermore, out of the total U.S. production of Christmas trees (about 34-35 million), approximately 500,000 to 750,000 were sent to Mexico. (Ibid). (See figure 1).
U.S. growers claim that Mexican Officials make it difficult for U.S. exporters to sell Christmas trees to Mexico. Mexico does not produce their own Christmas trees. American growers hoped that the North American Free Trade Agreement would allow access to the Mexican market. This rosey scenario has been tainted, though, in recent years as one U.S. exporter explains. "We would dearly love to see these trees go to Mexico. There's all kinds of demand, lots of people approaching us to buy our trees. But the Mexicans have made it impossible this year." Figure 1. Christmas Tree sales to Mexico have increased since 1977.
US Christmas tree producers criticize Mexico's fairly new rule requiring that christmas trees sent to Mexico must be shook in order to dislodge bugs. Mexico has targeted two types of trees in particular, the Douglas fir and the Scotch pine (both pictured in this report). Many growers, however, contend that the cost of shaking equipment they are now forced to purchase hampers their ability to compete in the Mexican market. Many growers have had to invest in certain machines to shake the furs, costing anywhere betwen $100 to $500 dollars. "Mexico has become the biggest export market. They take a tremendous number of trees, but they also put on restrictions," said Greg Reed, sales manager for Alpine evergreen Co. in Port Orchard, WA. (Journal of Commerce, 11/18/94).
Shaking the trees has led many U.S. Christmas Tree exporters to shake their collective heads in amazement. "It's all political. They [Mexico officials] do things in retaliation for political reasons," one U.S. exporter said. (Ibid.) He and other growers believe that "tree shaking requirement is retaliation for U.S. pest standards on Mexican tomatoes." (Ibid.) Treatment and inspection have made it possible to certify trees from suspect regions as being free of the gypsy moth and other pests and diseases. However, in a major departure from an earlier agreement, Mexican officials reversed their earlier stance by deciding not to honor the phytosanitary certificate issued by plant quarantine inspectors in Canada and the United States. The certificate essentially provides a clean bill of health to a good tree, and the measure is accepted by many countries. Northern growers said they did not learn until this fall that the Mexican government would no longer accept the certificate.
The gypsy moth (pictured below) problem did not prevent Mexican brokers from buying trees grown in pest-free areas of the U.S. Pacific Northwest. But even those growers complained of the further problem of "hassling" and "needless delays" at the hands of low-level Mexican border officials, who decide if the trucks loaded with highly perishable trees pass muster. "These are not trained entomologists," said Arlene Frelk, a Wisconsin grower. "You're completely at the mercy of someone who sees a Christmas tree once a year."
One Christmas tree industry representative complained of "time-consuming roadside disputes over paperwork as well as orders to unload the fragile yuletide shipments for what are literally shakedowns of the trees to detect dropping pests, if any" (Ibid). Growers allege another kind of problem: "border officials with their hands out," in one account, and "rampant under-the-table payments" in another. "I've never paid anybody. Maybe that's why we have problems. We haven't caught on to what the system is," one grower said. "I didn't even ship this year. I got burned too bad last year."
A spot check in Mexico City by Washington Post correspondent Tod Robberson found most Christmas Trees for sale to be from Canada or Oregon -- and commanding those prices prices. Mexico's strict policies to combat deforestation have led to a small market in illegally cut home-grown Mexican Christmas trees, but one merchant, Raymundo Gomez Mota, told Robberson that "they try to sell them as if they're Canadian."
"It's easy to tell which ones are from Mexico," Gomez Mota added, pointing to a limp and threadbare frond (Ibid). Growers now believe that political and cultural reasons might be prime motivating factors behind Mexican behavior, in which case, negotiations might not bear fruit. Then, the dispute becomes more about trade barriers and importing American culture. This might be a topic of discussion at the upcoming Millenium Round Trade talks in late 1999.
Recently, Japan has been importing Christmas trees from the United States and other suppliers. Christmas trees cultivated in the Pacific Northwest most often are exported to the island nation. Selling Christmas trees to the Japanese is often a difficult task, because the Japanese mainly prefer the tiny bonsai variety, rather than the usual 8 foot Christmas tree.
Following recent marketing successes of such American 'traditions' and pastimes such as McDonald's and the sport of Golf, U.S. exporters have found that the Japanese have embraced the christmas tree as well. "It's going to be their interpretation of our tradition," says Bruce Prenguber, assistant director of the Western U.S. Agricultural Trade Association, based in Vancouver, WA. A recent shipment of about 700 Noble firs is one of the first intended for sale to Japanese customers, rather than U.S. military personnel. Exporters estimate that most of the trees probably will end up in hotel lobbies and restaurants. (Sylvia Weiland Nogaki. "Xmas Export: Growers Hope Japanese Take to Trees." The Seattle Times, November 19, 1991, Page B1.)
Christmas trees aren't entirely foreign to Japan. A few trendy Japanese buy Japanese-grown Christmas trees, which "tend to be small and scrawny," says Patricia Steinhoff, director of the Center for Japanese Studies at the University of Hawaii. (Ibid.) Usually, they hang a dozen or so ornaments on them. And it's not uncommon in Japan to simply buy the Christmas tree display, ornaments and all, and haul it home, Steinhoff says. Even though few Japanese are Christians, they celebrate Christmas as a non-religious holiday, buying special Christmas cakes at the bakery and holding sometimes rowdy parties on Christmas Eve. In the future, growers who want to sell to Japan may concentrate on growing 2- or 3-foot-tall trees, small enough to sit on a table. "People simply aren't going to buy a 7- or 8-foot tree," Steinhoff says. "There wouldn't be any place to sit." (Ibid.)
There are approximately 23 TED cases related to Mexico, and six cases in particular dealing with tree trade: Mexico Mesquite Tree Trade, Mexican Deforestation, (although the new environmental movement against deforestation does not include Christmas Trees), Otomi Mexico Environment in History, and finally, Chiapas Uprising and Trade.
There are also two cases dealing with tree infestation: Mexican Apple Exports, and Mexican Cherry Exports.
The Tomato Case is also relevant, as many U.S. Christmas Tree exporters believe that tree-shaking requirement is retaliation for U.S. pest standards on Mexican tomatoes.
Although the controversy surrounding Christmas Tree trade does not directly involve Japan, there are some important case studies to look at if you are interested: Japanese Cedar Trees, and U.S.-Japan Apple Dispute.
Finally, also see the following relevant cases:
Nematode Pine Trade Dispute,
Med Fly Fruit and Trade,
Avocado Dispute,
Chilean Grape Contamination,
and finally, Beetle Trade.
Date: SPRING 1999, Christopher Visser
DISagree and In Progress.
The environmental movement against deforestation does not include Christmas trees.
Although no formal law has been invoked, the issue could be taken up under the GATT MFN law which states that trade
concessions to one country shall be offered to all countries. This dispute may fall under NAFTA provisions. This formal procedure has not taken place.
WTO and Multilateral, or NAFTA and Regional
Two: (U.S. - Mexico)
Treaty.
a. Geographic Domain: North America.
b. Geographic Site: Western North America.
c. Geographic Impact: Mexico.
No.
Temperate. American trees are commonly grown in the Pacific Northwest. More specifically, California, Oregon, Michigan, Washington, Wisconsin, Pennsylvania and North Carolina are the top Christmas tree producing states.
The best selling trees are Scotch pine, Douglas fir, Noble fir, Fraser fir, Virginia pine, Balsam fir and white pine (University of Illinois Extension. Downloaded from http://www.urbanext.uiuc.edu/trees/treefacts.html)
Import Standard.
Direct. U.S. growers and exporters of Christmas Trees are still able to sell their goods on the world market despite Mexico's tree-shaking requirement.
a. Directly Related to Product: Yes, Trees.
b. Indirectly Related to Product: No.
c. Not Related to Product: No.
d. Related to Process: Yes. Infestation.
Christmas Trees.
See figure one for most current economic data available at this time. I've contacted growers and members of the National Christmas Tree Association, and they do not have economic records available for this report. The most recent figures are those presented in the body of this report. As I receive more information in the near future, I plan to update this page.
Medium. Wood.
U.S. and Mexico
Case Exporter: U.S.
Case Importer: Mexico and Japan
Leading Exporters (U.S.$): Approximately $5.9 billion dollars per year to Mexico. Most recent figures indicate that U.S. growers ship approximately 700 trees to Japan per shipment. the obvious question arises: How many shipments per year? I am still pressing officials for hard data. Some trees are bought by U.S. military personnel stationed in Japan. The trees sell for approximately $150.
Leading Importers (U.S.$): Mexico and Japan.
Infestation and, possibly deforestation.
Name: Fir Tree
Type:
Diversity:
Meduim and Product.
Medium to Low and 1-2 years.
Like products, mainly including artifical or synthetic trees. Soon after Christmas trees caught on, artificials arrived on the scene. The U.S. Patent office lists patents for no less than 700 fake trees, including the aluminum tree invented in 1959 by two Chicago men, Clarence Reece and Nathan Paul. (The Herald--Glasgow. "Tree Trade Puts on Glitter." December 12, 1998. Page 8.)
Yes. U.S. representatives of Christmas tree trade believe that one motivating factor behind Mexico's insistence of shaking trees might be cultural. It has been theorized by some growers that Mexican officials are not too terribly excited at the prospect of introducing this aspect of American culture into Mexico. On the other hand, the success of American business in Japan--that is the success of exporting uniquely American cultural ideas--is seen as a prime motivating factor in trying to sell Christmas trees to the Japanese. Japan is seen as being a more receptive audience and generally more willing to accept American culture.
No.
No.
Davies, John. "Export Boom Lights Up Western Yule Tree Sales." Journal of Commerce. December 17, 1993, Page 1.
DiBenedetto, William. "Mexican Yule Rule Shakes Up US Tree Growers." Journal of Commerce. November 18, 1994. Page 1.
"Forests Need More Care," Daily Yomiuri, (15 May 1995).
The Herald (Glasgow). "Trees Trade Puts on Glitter." December 12, 1998. Page 8.
Jameson, Sam . "The Pacific Rim: Trees, Trade and The Environment." Los Angeles Times. June 21, 1985, Page 3.
Kitabatake, Yoshifusa. "What Can Be Learned from Domestic and International Aspects of Japan's Forest Resource Utilization?" Natural Resources Journal , (Fall, 1992): 855-881.
MacDougall, A. Kent. "Solemn transition; Worldwide Costs Mount as Trees Fall." Los Angeles Times. June 14, 1987, Page 1.
___________________. "Man's Dominant Raw Material; The Vansihing Forests;
Need for Wood Forestalled Conservation." Los Angeles Times. June 17, 1987, Page 1.
Nectoux, Francois and Yoichi Kuroda. Timber From The South Seas. (WWF Internaitonal Publication, 1989).
Nogaki, Sylvia Weiland. "Xmas Export: Growers Hope Japanese Take to Trees." The Seattle Times, November 19, 1991, Page B1.
Statistics Bureau, Management and Coordination Agency. Japan Statistical Yearbook. (Tokyo, Japan Statistical Association, 1994).
Trueheart, Charles. "The Christmas Tree That Couldn't Go South;
Canadian, U.S. Growers Complain That Despite NAFTA, Mexico Is Raising Barriers." The Washington Post, December 22, 1994, Page A34.
Varley, H. Paul. Japanese Culture. (Honolulu, The University of Hawaii Press, 1984).
II. Legal Clusters5. Discourse and Status:
6. Forum and Scope:
7. Decision Breadth:
8. Legal Standing:
III. Geographic Clusters9. Geographic Locations
10. Sub-National Factors:
11. Type of Habitat:
IV. Trade Clusters12. Type of Measure:
13. Direct v. Indirect Impacts:
14. Relation of Trade Measure to Environmental Impact
15. Trade Product Identification:
16. Economic Data
17. Impact of Trade Restriction:
18. Industry Sector:
19. Exporters and Importers:
V. Environment Clusters20. Environmental Problem Type:
21. Name, Type, and Diversity of Species
22. Resource Impact and Effect:
23. Urgency and Lifetime:
24. Substitutes:
VI. Other Factors25. Culture:
26. Trans-Boundary Issues:
27. Rights:
28. Relevant Literature
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