Tomato Trade War with Mexico Averted

By Karl Reiner

At the behest of Florida growers, the U.S. Department of Commerce was investigating the charges of low
M tomatoprice dumping of Mexican fresh tomatoes in the U.S. market. The tomato dispute could have triggered a trade war with Mexico because Mexican authorities threatened to impose retaliatory tariffs on American exports of meat, poultry and grains.

A few days ago, the Commerce Department announced that it had negotiated a solution with the Mexican government and growers.  A draft agreement had been initialed.  The proposed agreement covers imports of all fresh or chilled tomatoes of Mexican origin, except tomatoes for processing.  Mexican fresh tomato exports to the U.S. are valued at approximately $1.9 billion per year.

The volume of Mexican tomato imports subject to the agreement was broadened. Enforcement in Mexico was improved through mechanisms put in place by the Government of Mexico. On the U.S. side, agreement enforcement is strengthened by the addition of a reporting mechanism administered in accordance with U.S. Department of Agriculture  regulations. 

New winter and summer floor prices were established for an expanded list of four tomato categories.  Public comments on the draft text are due by February 11, 2013.  After the comments are reviewed, the final agreement is expected to be signed on or about March 4, 2013.

Nogales is a major port of entry for Mexican produce.  Tucson is a destination for Mexican shoppers.  Back in November after a 6-0 vote, the Tucson City Council notified Commerce that it feared damage to the region's economy would result if a trade war developed.  The pending agreement appears to have put the city's fears to rest.   

 

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