The Commerce Department has struck a deal with Mexican tomato producers to allow for trade to continue without tariffs, but under conditions expected to protect U.S. producers from underpriced imports.
The new draft of a suspension agreement sets several reference prices to address U.S. producers’ claims that Mexican exporters have been skirting previous provisions designed to prevent them from selling their fruit into the U.S. at below-market prices.
“For many years, there have been disputes over the roughly $2 billion worth of tomatoes that are imported from Mexico annually,” Commerce Secretary Wilbur Ross said in a statement. “These disputes led the department to terminate an earlier suspension agreement and continue an investigation that could have led to duties of 25 percent for most Mexican tomato producers. ... This draft agreement meets the needs of both sides and avoids the need for antidumping duties.”
The new deal, which will go into effect Sept. 19, represents a compromise on inspections of Mexican tomatoes. Jesús Seade, Mexico’s top North American negotiator, and other Mexican officials have complained about a previous U.S. proposal for blanket inspections at the border. Beyond snarling traffic at border checkpoints, the U.S. proposal would have invited reprisal inspections of U.S. goods entering Mexico.
The new compromise deal, which “includes a brand-new inspection mechanism to prevent the importation of low-quality, poor-condition tomatoes from Mexico,” is being lauded by Seade and Mexico's U.S. ambassador, Martha Bárcena.
“The Tomato Suspension Agreement is achieved !!!” Seade said in a tweet Wednesday. “Congratulations, producers, recognizing your infinite determination to reach an agreement in this important sector of Mexico-US trade.”
The deal that prevents new tariffs is a major win for Mexico. About 95% of all the tomatoes the country exports are sold to U.S. consumers.
But it’s also a major win for U.S. producers. The Florida Tomato Exchange, which petitioned the Commerce Department last November to scrap the 2013 suspension agreement, says U.S. producers have been losing their domestic buyers for years as the presence of Mexican tomatoes have grown from 20% of the U.S. market in 1994 to about 60% of the market now.
For more news, go to Agri-Pulse.com.