Florida, FPAA exchange salvos in tomato dispute

01/24/2013 06:45:00 PM
Tom Karst

Jungmeyer said he was not privy to how close the two sides are to a satisfactory solution or what revised minimum prices levels are being considered.

Kilbride said the U.S. and Mexico can’t let the trade dispute get in the way of their important trade relationship.

Chamberlain said the suspension agreement has been used successfully for 16 years and shouldn’t be abandoned.

In particular, he said potential preliminary antidumping tariffs following the end of the suspension agreement and put in place during a dumping investigation would have a chilling effect on importers. For example, he said the Department of Commerce could initially create a 40% preliminary duty but 10 months later raise it to 50%. That would create cash flow problems for importers because they would have no way to get the extra margin needed to pay the government, Chamberlain said.“It would be impossible to pay,” he said.

Talks continue

A Commerce Department spokesman, speaking on condition of anonymity, said Jan. 24 that agency officials are talking with Mexican growers and exporters on the suspension agreement, with talks taking place in Washington, D.C.

Terence Stewart, managing partner in Stewart and Stewart, Washington, D.C., represents domestic growers seeking a changed-circumstance review with the Department of Commerce.

Stewart said there are three proceedings relating to the tomato dispute.

One process, with no set timeline, is the consultation between Mexican producers who are subject to the suspension agreement and the Commerce Department.

Another process is the changed-circumstances review that the Department of Commerce initiated. That process has a 270-day deadline from when it was initiated in August.

“At the moment, we’re on a schedule where factual submissions have been completed and briefings start next week and the week after,” he said Jan. 23. No date has yet been set for a hearing, he said.

The last part of the process is a sunset review of the suspension agreement, which has seen two postponements by the Department of Commerce, Stewart said.

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Reggie Brown says he wants free trade and that he can’t imagine a scenario where Mexican tomatoes would be excluded from the U.S. But in his own press release from June 25, 2012, Brown says “The suspension agreement isn't working, and needs to be terminated. The facts have changed and the current agreement is unfair to U.S. growers and their workers. It's time to abandon the agreement which limits our ability to ensure fair trade in tomatoes and give us a chance to compete. The existing agreement ties our hands behind our backs while a flood of unfairly priced tomatoes swamps our market. The Obama Administration should do what every previous Administration has done in similar circumstance by quickly terminating the suspended investigation and suspension agreement. That will allow for the facts to drive the result should the industry file a new petition and for fair trade to work.”

Brown has telegraphed Florida’s intentions, which is to file a new anti-dumping petition, and the practical impact is that it will deter Mexicans from growing tomatoes and selling them into the United States. The preliminary anti-dumping duties from 1996 were arrived at unfairly, and Mexico should have fought them. The duties were frightening enough that Mexico entered into the suspension agreement, because the duties would have caused such extreme cash-flow issues that only those with very deep pockets could continue in business. So while Reggie Brown says Mexican tomatoes would not be excluded by Commerce, as a practical matter they would be. This is protectionist football at its finest, and Reggie Brown is quite the play-caller. Unfortunately not too many people can see past his charade.