U.S. announces new draft suspension agreement on fresh tomatoes from Mexico
The U.S. Department of Commerce (DOC) initialed a draft agreement with Mexican tomato growers to suspend the ongoing antidumping (AD) investigation of fresh tomatoes from Mexico, ensuring that the domestic tomato industry will be protected from unfair trade.
The U.S. Department of Commerce (DOC) initialed a draft agreement with Mexican tomato growers to suspend the ongoing antidumping (AD) investigation of fresh tomatoes from Mexico, ensuring that the domestic tomato industry will be protected from unfair trade.
“For many years, there have been disputes over the roughly $2 billion worth of tomatoes that are imported from Mexico annually,” said Secretary of Commerce Wilbur Ross. “These disputes led the DOC to terminate an earlier suspension agreement and continue an investigation that could have led to duties of 25% for most Mexican tomato producers. After intensive discussions with all parties, we initialed a new draft suspension agreement with the Mexican growers late last night. This draft agreement meets the needs of both sides and avoids the need for antidumping duties.”
The draft suspension agreement has enforcement provisions that 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 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 DOC to audit up to 80 Mexican tomato producers per quarter, or more with good cause.
The statute requires a 30-day notice period after today’s initialing of the draft agreement. At that point, on September 19, the DOC and the Mexican growers could sign a final agreement. If this occurs, the DOC will suspend the ongoing AD investigation without issuing a final determination.
The draft agreement stems from a Nov. 14, 2018, request from the Florida Tomato Exchange that the DOC terminate the 2013 Suspension Agreement on Fresh Tomatoes from Mexico. On Feb. 6, 2019, the DOC 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, the DOC continued its AD investigation on imports of fresh tomatoes from Mexico.
In response to the announcement, Sonny Perdue, U.S. secretary of agriculture, issued the following statement: “I want to thank my colleagues at the U.S. Department of Commerce for working diligently to reach a mutually beneficial agreement for tomato growers in both the United States and Mexico. Protecting America’s tomato producers from the glut of Mexican imports is yet another example of President Trump’s commitment to ensuring our farmers have the ability to succeed in international markets, as well as right here at home. Tomato producers across America, including those in Arizona, California, the Carolinas, Florida, and Georgia will benefit from the elimination of the unfair trade practices we have seen from these Mexican tomato imports.”