See related article: Mexico tomato interests look to keep agreement.
(UPDATED COVERAGE, Sept. 28) The tomato suspension agreement between Mexican tomato growers and the U.S. appears to be doomed, potentially opening up new trade frictions between the two countries.
Lance Jungmeyer, president of the Fresh Produce Association of the Americas, Nogales, Ariz., said the importing community in Nogales was shocked about the decision, which the group said was possibly motivated by political interests in favor of the Obama administration.
The Department of Commerce announced a preliminary decision September 27 to terminate the suspended antidumping investigation, effectively killing the 16-year-old suspension agreement.
In August, the Department of Commerce said it would take comments on a request by Florida tomato interests to terminate the suspension agreement, which has governed the price of imported Mexican tomatoes since 1996. The Department of Commerce must announce a final decision by late April but could move sooner.
“I think the fact that groups like Wal-Mart, (the Food Marketing Institute, the National Restaurant Association) and U.S. Chamber of Commerce have weighed in certainly puts the Department of Commerce on notice that everyone is watching,” Jungmeyer said.
Jungmeyer said there are 350,000 jobs in Mexico that rely on the tomato export industry, and Mexico takes its number one export to the U.S. very seriously.
The Department of Commerce is seeking comments on the preliminary results until 15 days after its publication in the Federal Register, which was expected to be Sept. 28.
Florida tomato industry leaders were pleased with the news.
“Our preference would have been for a final ruling as opposed to a preliminary ruling, but we appreciate the challenge the Commerce had in sorting through the various filings that have come forward,” said Reggie Brown, vice president of the Florida Tomato Exchange, Maitland, Fla.
Brown said the withdrawal of the suspension would put in place a free market where there would be no restrictions on Mexican imports — but the Florida tomato industry will “exercise trade laws” if it perceives dumping is occurring, as it did when seeking the original 1996 ruling.
Jungmeyer said Florida leaders have promised to pursue anti-dumping actions, but there are problems with trying to prove dumping when Mexican producers have been complying with the price suspension agreement with the U.S. for years.