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Commerce Department & Mexican growers reach agreement

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Last night, the U.S. Department of Commerce 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 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 $0.31/lb., stem-on tomatoes at $0.46/lb., tomatoes on the vine at $0.50/lb., specialty loose tomatoes at $0.49/lb., and specialty packed tomatoes at $0.59/lb., with organic tomatoes priced 40% higher than non-organics.

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 the Department to audit up to 80 Mexican tomato producers per quarter, or more with good cause.

The draft agreement stems from a November 14, 2018, request from the Florida Tomato Exchange that Commerce terminate the 2013 Suspension Agreement on Fresh Tomatoes from Mexico. On February 6, 2019, Commerce 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, Commerce continued its AD investigation on imports of fresh tomatoes from Mexico.

Border Trade Alliance President Britton Clarke said, “The Border Trade Alliance applauds the Commerce Department and tomato growers in Mexico for their diligent work over the last several months to preserve the duty-free construct that has defined U.S-Mexico trade for decades.

“As we and our colleagues in the trade community have made clear, imposing duties on fresh tomato imports would not only have hurt U.S. consumers in the pocketbook, but it would have run completely counter to the spirit of binational cooperation imbued in NAFTA and now the USMCA, and would have severely complicated the new agreement’s fate on Capitol Hill.

“While we are relieved that new duties and higher prices will not continue to be passed on to U.S. importers and consumers, we are wary of any new mandated inspection regime that could dramatically slow processing times of tomato imports at U.S. ports of entry and put freshness and quality at risk. We will examine any new inspection mandate closely.”

Any views or opinions expressed in this article are those of the author and do not reflect those of AGDAILY. Comments on this article reflect the sole opinions of their writers.
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