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Tomato agreement reached with MexicoTomato agreement reached with Mexico

Tomato deal lifts current preliminary duties of 17.5% against Mexican tomatoes and suspends antidumping investigation.

August 22, 2019

3 Min Read
Tomato agreement reached with Mexico

The U.S. Department of Commerce (DOC) initialed a draft agreement with Mexican tomato growers to suspend the ongoing antidumping investigation of fresh tomatoes from Mexico, ensuring that the domestic tomato industry will be protected from unfair trade, the department reported.

“For many years, there have been disputes over the roughly $2 billion worth of tomatoes that are imported from Mexico annually. These disputes led the department to terminate an earlier suspension agreement and continue an investigation that could have led to duties of 25% for most Mexican tomato producers. After intensive discussions with all parties, we initialed a new draft suspension agreement with the Mexican growers late [Tuesday] night. This draft agreement meets the needs of both sides and avoids the need for antidumping duties,” Secretary of Commerce Wilbur Ross said.

Among other things, the deal lifts current preliminary duties of 17.5% against Mexican tomatoes and suspends an antidumping investigation against Mexican producers begun earlier this year.

The draft suspension agreement has enforcement provisions that completely eliminate the injurious effects of Mexican tomatoes as well as price suppression and undercutting. The draft agreement sets reference prices for rounds and romas at 31 cents/lb., stem-on tomatoes at 46 cents/lb., tomatoes on the vine at 50 cents/lb., specialty loose tomatoes at 49 cents/lb. and specialty packed tomatoes at 59 cents/lb., with organic tomatoes priced 40% higher than non-organic varieties.

Related:U.S. to resume antidumping investigation into Mexican tomatoes

The draft agreement also closes loopholes from past suspension agreements that permitted sales below the reference prices and includes a brand-new inspection mechanism to prevent the importation of low-quality, poor-condition tomatoes from Mexico, which can have price-suppressive effects in the market. In addition, the draft agreement allows DOC to audit up to 80 Mexican tomato producers per quarter, or more with good cause.

The statute requires a 30-day notice period after the initialing of the draft agreement. At that point, on Sept. 19, DOC and the Mexican growers could sign a final agreement. If this occurs, DOC will suspend the ongoing antidumping investigation without issuing a final determination.

The draft agreement stems from a Nov. 14, 2018, request from the Florida Tomato Exchange that DOC terminate the 2013 Suspension Agreement on Fresh Tomatoes from Mexico. On Feb. 6, 2019, DOC notified the Mexican signatories that it would withdraw from the 2013 suspension agreement. On May 7, 2019, the 2013 suspension agreement was officially terminated, and as a result, DOC continued its antidumping investigation into imports of fresh tomatoes from Mexico.

Related:Tomato industry warns of potential monopoly manipulation

The department said tomato producers across America, including those in Florida, Texas and Arizona, will benefit from this agreement.

American Farm Bureau Federation president Zippy Duvall welcomed the deal and said all parties, including growers, back the agreement.

“We are pleased and relieved to see progress with one of our largest and most important trading partners,” Duvall said. “Mexico is a vital trading partner for American farmers and ranchers. We need this agreement and are grateful negotiators capitalized on the close relationship that exists between our two nations. We look forward to more progress on the trade front and are counting the days until the [U.S.-Mexico-Canada Agreement] becomes law.”

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