A 16-year accord between the United States and Mexico that set prices for Mexican tomato imports is now in jeopardy following the U.S. Commerce Department’s announcement this week that it is taking a preliminary step to end that agreement. Florida tomato farmers were joined by tomato growers in other states saying the agreement, adopted in place of an anti-dumping investigation, is outdated and ineffective. Without the pact, Commerce could impose duties on Mexican tomatoes, which could spark a trade war, according to the Fresh Produce Association of the Americas, an importers organization.
The Commerce Department explained that it has agreed to end an investigation into whether Mexican tomatoes were sold in the U.S. market below cost, a probe that was suspended when the pricing agreement was adopted in 1996. Ending the investigation terminates the pricing agreement, the Commerce Department said in its memorandum announcing its preliminary findings. Commerce added that it would make its final determination “as soon as practicable,” but not longer than 270 days.
The dispute potentially re-opens a rift between the United States and its third-largest trading partner. The United States imported $8.5 billion in agriculture commodities and food products from Mexico, more than any other nation. Of these Mexican imports, tomatoes account for $1.9 billion. Mexico’s Minister of the Economy Bruno Ferrari said about 350,000 workers are employed by his country’s tomato industry. U.S. exports of agricultural products to Mexico were $8.7 billion last year. Agricultural and business interest on both sides of the border favor keeping the current pact because otherwise a dispute could cause a tomato trade war that would have collateral damage on other commodities.
