It’s official: Tomato agreement on the block - The Packer

It’s official: Tomato agreement on the block

10/02/2012 12:33:00 PM
Coral Beach

tomatoesWith the clock ticking on a 270-day countdown to the final decision about the tomato trade agreement with Mexico, supporters of the agreement reiterated their stand as the Commerce Department officially posted its intent to end the agreement.

In a Federal Register notice on Oct. 2, the Commerce Department laid out the timetable for the process. But U.S. produce and business leaders said during a media teleconference the same day that the department’s intended action is based on erroneous information from the Florida tomato industry and the U.S. Department of Agriculture.

Bill ReinschReinschBill Reinsch, president of the National Foreign Trade Council, Washington D.C., said the 80 growers who requested the termination do not represent 85% of tomato producers in the U.S., which is the minimum percentage necessary as required by federal statute.

“It is important for the department to follow the letter of the law,” Reinsch said.

Mexican growers contend the 80 U.S. growers who want the agreement terminated only represent 42% of U.S. tomato growers, said Lance Jungmeyer, president of the Fresh Produce Association of the Americas, Nogales, Ariz. He said part of the discrepancy is because there are thousands and thousands of growers who are not reflected in USDA statistics, which focus on larger operations.

In the Federal Register notice, the Commerce Department officials noted the dispute about the grower percentage requirement, saying that “the USDA Yearbook is an objective and reliable source.” The notice states the department will accept comments on its intent to terminate for 15 days. Additional comment periods are built into the 270-day process.

Reinsch said the situation “has all the earmarks of a process that is trying to push a decision” before the presidential election, citing political motivation because of Florida’s so-called swing-state status.

Agreeing that there was political motivation, one supporter of the agreement said that goal has already been met.

John McClungMcClung“Florida has gotten part of what they want, politically,” said John McClung, president of the Texas International Produce Association, adding that even though the 270-day process will play out after the Nov. 6 election, voters in Florida have already seen support from the Obama administration.

McClung said the remaining issue for Florida growers is a higher base price on Mexican tomatoes. Jungmeyer said the agreement currently has the price set at roughly 21 cents per pound in winter and about 17 cents per pound in summer. He said about half of the fresh tomatoes in the U.S. during winter are from Mexico, with the other half coming from Florida.

McClung said he believes the second phase of the Florida growers’ strategy is to immediately request a dumping investigation once the suspension agreement is dropped.

“Those can go on for years and years and cost a lot,” McClung said, adding that all the while the Florida growers would have the advantage of no competition from Mexican tomato growers.

That would most likely mean higher prices for U.S. consumers at the grocery store and in restaurants, he said.

The potential for retaliatory tariffs on U.S. produce is another concern.

When the U.S. failed to allow Mexican trucks to cross the border as required by the North American Free Trade Agreement, Mexico slapped tariffs of 10% to 45% on several U.S. commodities. McClung said the apple industry was hit particularly hard because Mexico is the largest export market for U.S. growers.

Lance JungmeyerJungmeyerJungmeyer said his recent conversations with Mexican growers and officials proved to him that tariffs would undoubtedly be imposed.

“Many officials feel this is an affront. It’s a matter of national pride and they feel justified in taking action,” Jungmeyer said.

In addition to pricing and tariff issues, the supporters of the 16-year-old tomato trade agreement said its termination would have a ripple effect on the U.S. economy. Victims of those effects included trucking companies and the service providers they use while transporting the loads.

“There would be less collected in fuel taxes and less money spent at restaurants and hotels along their routes,” Jungmeyer said.

Jungmeyer said the port of entry at Nogales sees about 1,200 trucks daily cross into the U.S. with fresh produce during winter months. About a third of those are full of tomatoes.

McClung said American jobs are also at stake.

“The importers who are opposing this termination are not doing so to protect Mexican jobs, they are doing it to save jobs in the U.S.,” McClung said, explaining that the importers would reduce staff if they did not have Mexican tomatoes to pack and ship.

Ultimately, the supporters of the current trade agreement said the push by the Florida growers to terminate the agreement now is unnecessary because it is scheduled to end in December anyway. At that time, the terms of the agreement would have been renegotiated.

Agreeing with Reinsch of the National Foreign Trade Council, McClung said the termination effort was launched to create an “artificial urgency because of growers in a swing state.”

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Florida  |  October, 03, 2012 at 06:46 PM

U.S. can do with out Mexican tomatoes but the real question is can the Mexican drug cartell do with out their income by washing their money, sending us produce below the cost of producing the crop? Maybe the drug lords will shoot and kill more Americans as they transport drugs into the USA, as they did two days ago. But they still have to convert the ill earned cash into "washed money" and the method they have chosen is produce. If you don't beleave this how can a sane person understand how a Mexican grower/shipper continue to ship below production costs on so many items? Buy American grown by American growers. Thank you, Chuck Obern (I ain't scaierd, bring it on!)

Guadalajara  |  October, 03, 2012 at 11:26 PM

The U.S. can do with out Mexican tomatoes until Florida's winter crop freezes over, as it is prone to do. And if this was about drugs (which it isn't), drug use is far greater in the USA than in Mexico). And America is hardly free if wanton violence, with mass murders occurring in Tucson, Colorado and Virgina etc. But that's irrelevant to the issue and If slandering Mexico is the best Florida growers can do you're in deep trouble. And everyone knows that Mexico provides America's consumers with a superior, fresher product.

Florida  |  October, 04, 2012 at 07:38 AM

dhinds, we do not buy into your lies. There is nothing superior or fresher about mexican produce. All the different growers in different countries get their seeds from the same few places, and many of the growing methods are the same. Concerning freshness, American grown produce is often fresher because there is no border-crossing delay, and the produce is grown closer to the end user. Also, the people who work in our produce industry have access to proper sanitary facilities both at work and at home. Our neigborhoods have excellent reliable waste management systems, and our municipal water can be consumed and bathed in with no fear of aquiring an illness. The same is often not true in many mexican municipalities. Even if the mexican packing house is clean and has good water, the same may not be true when the workers go home. If they get a water-borne illness at home, they will be bringing it to work with them, and hand-washing alone may not be enough to contain it.

Florida / Arizona  |  October, 16, 2012 at 08:31 AM

John - Go back to school man , you need it ".

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