Nov 29, 2018Florida Tomato Exchange alleges Mexican dumping
Florida Tomato Exchange (FTE) is alleging Mexico is engaging in commodity dumping that is hurting U.S. tomato growers around the country.
Dumping – the selling of a product in a foreign market at a price lower than the domestic price – is usually done when a monopoly or small group of sellers has such a large output that selling entirely in the domestic market would substantially reduce the price.
FTE distributed the following written statement on Wednesday, Nov. 28:
“Earlier this month the Florida Tomato Exchange (FTE) requested that the Department of Commerce terminate the Tomato Suspension Agreement with the Mexican tomato industry. The current agreement has been in effect since 2013, and previous suspension agreements were in place from 1996 to 2013. These agreements – which were negotiated between the Commerce Department and the Mexican industry – have been suspending the U.S. government’s antidumping investigation of Mexican tomatoes.
“The suspension agreements were meant to protect the U.S. tomato industry from unfair Mexican trade practices, but unfortunately the agreements have not worked as intended. The structure of the agreements has been difficult to enforce, and loopholes abound. This has allowed the Mexican industry to use the suspension agreement as cover for continued dumping. As a result, Mexican tomato companies increased their U.S. market share from 32 to 54 percent between 1996 and 2017, while the market share for U.S. tomato producers declined from 65 to 40 percent during the same period. The numbers have been especially dire over the last 15 years. Between 2002 and 2017, U.S. tomato production declined by 34 percent from 4.4 billion pounds to 2.9 billion pounds. During that same period, Mexican tomato imports to the U.S. skyrocketed 125 percent from 1.6 billion pounds to 3.6 billion pounds. Since these agreements went into effect, hundreds of U.S. tomato growers have been forced out of business.
“The U.S. tomato industry appreciates the efforts of the Commerce Department to try to negotiate changes that would make a new suspension agreement more effective and enforceable. The Commerce Department has been, as required by U.S. law, consulting closely with the FTE on changes that are needed. Unfortunately, the Mexican tomato industry has shown no interest in a new agreement that would actually stop dumped tomatoes from injuring U.S. tomato growers and packers.
“Strong enforcement of U.S. trade laws is critical to the survival of American companies, farmers and workers that are being injured by dumped and subsidized imports. Because the 2013 agreement has failed, and the Mexican industry has not showed a willingness to meaningfully negotiate, the only path available for the U.S. tomato industry to protect itself against Mexican dumping is for the Commerce Department to terminate the agreement.”
This is National in Scope; Not just Florida
“Our Mexican counterparts have asserted that the FTE represents “only a small portion of the U.S. industry.” This is false. In addition to Florida, the FTE member companies are among the largest tomato growers in California, Georgia, South Carolina, North Carolina, Virginia, New Jersey, and Puerto Rico. FTE members produce approximately 50 percent of the fresh-market tomatoes grown in the U.S. Furthermore, the FTE has strong support from tomato growers across the U.S. who aren’t FTE members. This includes growers in Michigan, Tennessee, Alabama, as well as the states mentioned above; it includes greenhouse operations and open-field producers. Our alliance is national in scope because all segments of the U.S. tomato industry are feeling the pain caused by the Mexican tomato industry’s unfair trade practices. What was once a problem primarily for winter producers in Florida is now a year-round challenge for all U.S. tomato growers.
“The Tomato Suspension Agreement has always had the right intentions, but it simply hasn’t worked. Over the last 22 years, three different agreements have had to be negotiated because the FTE consistently challenged the effectiveness of each agreement. These repeated failures have left the U.S. tomato industry with no choice but to ask the Commerce Department to terminate the agreement. Termination is the only course of action that will allow the U.S. industry to finally have its day in court to pursue its antidumping case against the Mexican tomato industry under the U.S. unfair trade laws.”