Oct 14, 2019

Florida group seeks continuation of antidumping investigation of Mexican tomatoes

The following is a statement issued Oct. 14 from the Florida Tomato Exchange:

“The Florida Tomato Exchange (FTE) has filed a request for continuation of the antidumping investigation of fresh tomatoes from Mexico. The investigation was suspended on Sept. 19, 2019, when a new suspension agreement between the Department of Commerce and Mexican growers and exporters went into effect. U.S. trade law, however, permits domestic producers to request continuation of the investigation.

The FTE is taking this action reluctantly. The Department of Commerce did an excellent job under difficult circumstances negotiating the new suspension agreement, which the FTE continues to support. Unfortunately, the Mexican tomato industry does not agree and has signaled its intention to challenge the agreement legally and politically, even though they signed the agreement just last month. The resumption of the investigation will not necessarily terminate the suspension agreement. In fact, the FTE’s objective in taking this action is to protect the integrity of the new agreement.

In an Oct. 3 letter to the Commerce Department, the Mexican growers associations, CAADES et al., signaled a strong likelihood that they will challenge the new suspension agreement in court. There have also been multiple public reports that the Mexican tomato industry will do everything possible to renegotiate the agreement and are counting on strong action by the Mexican government to insist on changes. Additionally, both CAADES and Red Sun Farms – a large Mexican producer – have pending litigation against the U.S. government at the Court of International Trade. The appeal by Red Sun Farms argues that Commerce did not lawfully terminate the 2013 Suspension Agreement, thereby asserting that the old suspension agreement should be reinstated.

These actions clearly indicate that the Mexican industry plans to force a renegotiation of the agreement by withdrawing at some point in the near future. This is a tactic the Mexican tomato industry used three times in the past to avoid sunset reviews and to negotiate new agreements that were more favorable to them. Those resulting agreements failed to protect the U.S. tomato industry from the injury caused by dumped Mexican tomatoes. Given this past precedent and the ongoing actions of the Mexican industry, the FTE has no choice but to request continuation of the investigation.

Possible outcomes

The suspension agreement will remain in effect during the resumed investigation. Upon completion of the investigation, Commerce and the International Trade Commission (ITC) will determine whether or not Mexican tomatoes were dumped in the U.S. and whether the dumping caused injury to the U.S. tomato industry. If both determinations are affirmative, the suspension agreement will remain in place, and duties will not be imposed so long as the agreement is in effect. Alternatively, if there is a negative finding, the proceeding will end, the suspension agreement will be terminated, and there will be free trade.

It is important to reiterate that the new suspension agreement will continue even if Commerce and the ITC make affirmative findings. An affirmative finding should, however, discourage the Mexican tomato industry from using legal and political maneuvers to try and weaken the agreement. Any future withdrawal from the agreement by either the Mexican growers or by Commerce would automatically trigger a 90-day window to renegotiate before anti-dumping duties are imposed. This potential for a more immediate imposition of antidumping duties – without having to resume the investigation – should create a strong incentive for the Mexican tomato industry to abide by the new agreement, which they signed, and to stop spending time and money attacking the agreement politically and in the courts.”

Mexican tomato growers respond

Associations representing almost 100 percent of Mexican tomato growers issued the following statement today in response to the decision by the Florida Tomato Exchange:

“We are surprised by the announcement that the FTE is seeking a continuation of the antidumping investigation that could void the agreement recently reached with the Commerce Department after many months of negotiations. Its announcement of its intent to do so is misleading and mischaracterizes recent events.

“The Mexican tomato industry negotiated its agreement with the Commerce Department in good faith and has every intention of abiding with that agreement throughout its term. So long as the agreement is administered in good faith and in accordance with its terms, the Mexican industry has no intention of ever withdrawing. The October 3 letter the Mexican industry filed with the Commerce Department did not signal an intent either to challenge that agreement in court or to renegotiate the agreement. The letter simply corrected the characterization of data and certain unfounded allegations put on the record after the agreement was signed. And the growers have not challenged the agreement in court or asked to renegotiate it, nor have they stated that they plan to walk away from the agreement. The growers have every right to challenge incorrect misleading statements put on the record of the proceeding by other parties. ‘We intend to abide by this agreement we negotiated with the Trump Administration,’ said Mr. Guillermo Jimenez, President of AMHPAC, Mexico’s largest growers’ association.

“At the same time, if the FTE insists on continuing the investigation and taking the matter to the ITC, the Mexican industry is ready to do so and confident of prevailing. As Mr. Rosario Beltran of the CAADES association said: ‘The data show clearly that U.S. producers are not injured or threatened with injury by imports from Mexico. Rather, our growers have done just what good, private companies should do. We have spent billions of dollars over recent years converting our production to greenhouses and other protected agriculture types of production to bring a fresher, vine-ripe tomato to the U.S. market. U.S. consumers have turned to those tomatoes not because they are cheaper, because they are not, but because they are fresher and tastier and simply a better product.’

“Unfortunately, as they have for decades, the FTE continues to do whatever it can to distort trade in fresh tomatoes in the United States. Their latest gesture not only unduly extends this legal process but is also a slap in the face to the Commerce Department, which negotiated a very strong agreement under enormous pressure.”