WASHINGTON, Feb. 3, 2013 – The U.S. and Mexico reached an agreement with Mexico that would change terms for fresh tomato imports to the U.S. and avert what many had feared would become a wider trade dispute.
“The draft agreement raises reference prices substantially – in some cases more than double the current reference price for certain products – and accounts for changes that have occurred in the tomato market since the signing of the original agreement,” said Francisco Sanchez, a senior U.S. Commerce Department official in a statement. The agreement also increases the types of tomatoes covered by the pact from four to one and strengthens compliance and enforcement.
The agreement will be open for public comment until Feb. 11.
Agriculture Secretary Tom Vilsack applauded the good work of Undersecretary Sanchez and the Commerce Department “to allow our domestic tomato industry to compete on a level playing field.
“The draft agreement meets the requirements of U.S. antidumping law and provides an effective remedy for our domestic tomato producers, further bolstering agriculture as a bright spot in our nation's economy,” Vilsack said in a statement. “Ultimately, the Obama Administration forged an agreement that will restore stability and confidence to the U.S. tomato market and ensure fair trade in fresh tomatoes through increased reference prices, coverage and strengthened enforcement.”
On September 27, 2012, U.S. Commerce officials sided with Florida growers and announced a “changed circumstances review, ” which was aimed at terminating a sixteen-year-old suspension agreement that kept Mexican fresh tomato prices relatively low at U.S. supermarkets.
The Nov. 1, 1996 agreement suspended a Commerce Department investigation that had started as a result of a dumpling complaint filed by U.S. tomato growers against their Mexican counterparts. In 2008, an agreement revised the floor prices for Mexican tomatoes at $0.216 per pound in the winter months and $0.172 per pound in the summer.
Mexican officials were unhappy with that Sept. 27 decision and threatened to retaliate against U.S. exports if the suspension agreement is lifted. Some accused President Obama with trying to win favor with Florida farmers in the crucial swing state just a couple of months before the presidential election. But Mexican growers offered a proposal to keep the suspension agreement in place with a higher floor price on their tomatoes and stronger enforcement of the agreement.
Florida tomato growers offered tentative support for the agreement reached Saturday.
"In the sixteen years since the first suspension agreement was imposed upon domestic producers, the industry has changed dramatically but the suspension agreement has failed to change with the times as technology and growing methods have changed. The agreement has not even kept up with inflation,” said Edward Beckman, President of Certified Greenhouse Farmers in Florida, in a statement.
“During the negotiations between the Department of Commerce and Mexico and their growers, we identified three essential components to any new agreement to bring about fair trade: pricing, coverage, and enforcement,” Beckman added. “Each component had to reflect the reality of today's market: inflation of almost 250% since the base year in Mexico; the changes within the industry in both the U.S. and Mexico that have taken place over the last sixteen years, including the growing importance of greenhouse tomatoes which have dramatically different growing environments and cost structures; and, the gaming of the system by Mexican exporters that has occurred."
"We believe that the Department of Commerce and Mexico have struck a deal that meets those three tests, and we're hopeful and optimistic that we'll be able to compete under fair trade conditions. Much work remains to have the agreement fully and faithfully implemented and continuous monitoring and enforcement will be critical.”
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