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Florida Tomato trade group wants Commerce Dept. to kill deal with Mexico [1]

['Mitch Perry', 'More From Author', '- June']

Date: 2023-06-20  

The organization representing most of the tomato industry in Florida is calling on the U.S. Department of Commerce to terminate the 2019 U.S.-Mexico Tomato Suspension Agreement, contending it has failed to protect U.S. growers against unfair trade practices.

Florida lawmakers such as U.S. Sen. Marco Rubio and U.S. Rep. Ted Yoho of North Florida encouraged and applauded the Trump administration’s Commerce Department for withdrawing from the 2013 Suspension Agreement on fresh tomatoes from Mexico in early 2019, saying it had allowed unfair competition to increasingly put U.S. tomato growers out of business.

But Michael Schadler, executive vice president of the Florida Tomato Exchange, says that the existing agreement isn’t aiding U.S. tomato farmers any more than the three previous deals between Mexico and the United States did, and that it’s time cut the cord on this pact and impose anti-dumping duties on Mexican tomatoes as soon as possible.

“Despite the good faith efforts of the Commerce Department over the last four years, the 2019 Suspension Agreement has not been able to close the loopholes that have always been a problem,” Schadler said in a written statement issued on Friday.

“It’s become clear that these agreements are simply not enforceable, at least when it comes to the tomato trade with Mexico. Suspension agreements might be an effective tool for products that can be kept in storage until market conditions improve, but for highly perishable items like fresh tomatoes, there is just too much incentive to evade the reference prices when markets are oversupplied.”

In a suspension agreement, exporters and producers or the foreign government agree to modify their behavior so as to eliminate “dumping,” which is when a company exports a product at a price that is lower in the importing market than in the exporter’s domestic market.

Years of complaints

Florida farmers for years have been pushing for restrictions on Mexican tomatoes, complaining that its government has been dumping fresh produce into the U.S. market. That has severely hurt farmers in the Southeast, especially during the winter months.

Following the signing of the most recent suspension agreement in September 2019, Schadler’s organization praised the deal, saying that it was a “step in the right direction to stop further injury to American farmers caused by dumped Mexico tomatoes.”

Schadler now says that while the average prices for grocers initially rose after the first year after the agreement was signed, they have declined over the past three years as “pressure resumed from unfairly traded Mexican imports.”

Suspension agreements by law are required to stop injury to the domestic industry caused by dumping, but Schadler says none of them have been effective in meeting that requirement.

In 1994, the year that the North American Free Trade Agreement (NAFTA) was signed, U.S. tomato growers supplied about 80% of the U.S. market and Mexico accounted for around 20%, the Florida Tomato Exchange says. Now it says Mexico’s share of the U.S. market is nearly 70%, while U.S. farmers have approximately 30% market share.

Requests for comment from the Florida Tomato Exchange and the Justice Department were not returned.

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[1] Url: https://floridaphoenix.com/2023/06/20/florida-tomato-trade-group-wants-commerce-dept-to-kill-deal-with-mexico/

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