A request by the Maitland-based Florida Tomato Exchange for the federal government to end its tomato suspension agreement with Mexico has drawn the ire of many Mexican greenhouse grower-shippers and sparked the interest of some California tomato growers.
The Florida group cited unfair trade practices in June as it asked the U.S. to end the agreement reached in 1996, when Florida growers accused their Mexican counterparts of “dumping” tomatoes in the U.S. below their cost of production.
In exchange for suspending an investigation into the charges, Mexican growers agreed to abide by a floor price for tomatoes exported to the U.S. The agreement was revised in 2002 and 2008.
The current floor price is 17.2 cents per pound from July 1 to Oct. 22 and 21.69 cents per pound from Oct. 23 to June 30.
Not playing fair
Reggie Brown, vice president of the exchange, said Mexican growers have not been playing fair, and he said the organization has filed documents with the U.S. Department of Commerce and the U.S. International Trade Commission requesting withdrawal from the anti-dumping duty petition, which would end the suspension agreement.
Brown said the reference prices cited in the agreements did not reflect the true production costs in Mexico.
“There are concerns that the market is being unfairly traded and dumping has been taking place, even under the agreement,” he said. “The domestic industry is concerned about that issue.”
There are trade laws in the U.S. that protect domestic industries from unfair trade practices, including dumping, he said. And there are procedures for industries to use those laws.
“Those are being very carefully examined,” he said.
Support for the action also comes from West Coast growers.
“California Tomato Farmers supports the withdrawal of the suspension agreement,” said Chris Zanobini, president of the Sacramento-based grower cooperative. “Our members also have weighed in on the subject.”
Brian Bernauer, director of sales and marketing for Fresh Pac International, Oceanside, Calif., which sources tomatoes from Baja California, said his feelings about the agreement remain unchanged.
“I hold the same opinion I had when they decided they needed the suspension agreement,” he said. “We’ve been a (signatory) since the first time it became legislation.”
Bernauer said he does not understand the reasoning of the Florida organization.
“We’ve had no problem with (the suspension agreement) at all,” he said.
Several Mexican growing organizations decried the recent petition in a joint news release issued in July.
“We are disappointed,” Rosario Beltran, Commission for Research and Defense of Horticultural Products chairman for CAADES — the Confederation of Agriculture Associations of the State of Sinaloa — said in the release.
“This agreement has worked well for 16 years, bringing stability to the market and settling one of the largest bilateral trade disputes between the U.S. and Mexico,” Beltran said. “If these Florida growers are successful in reigniting this trade war all over again, it will have an enormous negative impact on industries on both sides of the border, and prices will increase significantly for U.S. consumers.”
Fried DeSchouwer, president of Greenhouse Produce Co. LLC, Vero Beach, Fla., said U.S. growers are complaining that they can’t compete with their Mexican counterparts, but he said it’s not the fault of Mexican growers if U.S. growers have to use more fertilizer to treat their land or hire more expensive labor.
Some U.S. growers have complained that Mexican producers don’t have to comply with the strict food safety regulations that are in effect in the U.S., but DeSchouwer said Mexican product typically is third-party- and Global GAP-certified and also is certified locally and checked by the U.S. Department of Agriculture and the U.S. Food and Drug Administration when it is shipped to the U.S.
Chris Ciruli, a partner in Ciruli Bros., Rio Rico, Ariz., doesn’t see a need for a change in the agreement.
“We have had stability since the agreement was in place for the last 19 years,” he said. “I believe that’s a great track record.”
Both sides should keep lines of communication open, he said.
Mike Aiton, marketing director for Prime Time International, Coachella, Calif., which sources some of it product from greenhouses in Mexico, favors the suspension agreement as it stands.
“I think it’s been a good program, and one that should remain in place,” he said.
He does not expect to see changes anytime soon, he said.