Apr 9, 2019

Goodwill in negotiation of Mexican fresh tomato imports

The debate over import policy for Mexico-grown fresh tomatoes this week rebooted with some good vibes and offers of negotiation.

Associations representing most of the Mexican tomato industry on Monday, April 8, proposed to the U.S. Commerce Department changes to the 2013 Tomato Suspension Agreement that included provisions for enforcement and strategic price increases.

Those offers were presented in the spirit of goodwill, according to a press release from Mexican growers distributed by the New York-based communications firm Indelable.

“Our goal from the beginning of the renegotiation process has been to focus on enforcement even though there is no evidence of circumvention of the agreement,” said Oscar Woltman, president of AMPHAC, the largest Mexican growers association.

The U.S. is on track to withdraw on May 7 from the 2013 Suspension Agreement on Fresh Tomatoes from Mexico. The agreement for decades has put off an investigation of Mexico-grown fresh tomatoes being dumped in the U.S.

In trade talk, dumping refers to selling a product in a foreign market at a price lower than the domestic price.

“The domestic industry remains open to negotiating a new suspension agreement to prevent unfairly traded Mexican tomatoes from continuing to injure American tomato producers,” Florida Tomato Exchange Executive Vice President Michael Schadler said in released statement. “We welcome the Mexican proposal because, for the first time, it contains some useful suggestions on how to prevent circumvention of the suspension agreement by Mexican producers.

“We will be providing comments to the Commerce Department on the Mexican proposal along with ideas on how to improve the earlier Commerce Department proposal from October 2018. We are hopeful this will lead to negotiations between the Mexican growers and the Commerce Department for a new suspension agreement that will finally meet the statutory requirement to eliminate completely the injurious effects of unfairly traded tomatoes.”

According to the news release from Mexican growers, their proposed changes included:

• “Price increases ranging between 6 and 34 percent, including eliminating any differences between the summer and winter prices under the agreement, and establishing a higher price for specialty tomatoes grown organically.
• “Requirements that loads of Mexican tomatoes with more than 35 percent condition defects will have to be driven back to Mexico at the grower’s expense.
• “Provisions making exports of Mexican tomatoes under a different signatory number other than one’s own a violation of the agreement.
• “No adjustments can be made under the reference price.
• “Provisions to block unintended exports of fresh tomatoes from Mexico and better manage inventory levels in the United States.
• “Provisions to strengthen the ability of the Department of Agriculture to enforce the Tomato Suspension Agreement under the PACA by giving the Commerce Department all necessary grower documents to prove PACA violations.
• “New penalties for intentional violations of the agreement by Mexican growers or their selling agents.
• “Commitments by Mexican growers to help facilitate efforts by an interagency task force to enforce the agreement, including through on-site and video verifications, and a willingness to use independent auditors to help in that effort.”

– Stephen Kloosterman, Associate Editor

US growers, Mexican tomato importers spar over trade

A Q&A with FPAA President Lance Jungmeyer on tomato imports