Florida, FPAA exchange salvos in tomato dispute

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

“The study is brought forth because we are concerned as U.S. distributors about the ability to continue to be able sell Mexican tomatoes with the tomato trade dispute that is going on between the U.S. and Mexico,” Jungmeyer said.

'Wild assumptions'

Reggie Brown, executive vice president of the Maitland-based Florida Tomato Exchange, said he can’t imagine a scenario where Mexican tomatoes would be excluded from the U.S.

“If you make wild assumptions, which they do in their study, you get wild results,” Brown said. “Nothing in any of these issues would ever prevent Mexican product from entering the country. The issue is only the product entering the country under a free and fair-traded environment.”

Scaring the public with scarcity or food price spikes is unfortunate, Brown said.

“FPAA has been fairly consistent in taking extreme positions all the way through this issue, including threatening and intimidating the produce industry with trade wars, internationally decreed sanctions, all other kinds of things,” Brown said.

The scenario of Mexican tomatoes disappearing from U.S. grocery shelves is a real possibility, Jungmeyer said, if punitive or prohibitive antidumping measures are applied by the U.S.

Given that outcome, he said consumers could see prices double or more than double September through May.

Noting that the economic model would push prices more than $5 per-pound for some tomato varieties, Jungmeyer said the U.S. diet would suffer at a time when government agencies are urging greater produce consumption.

Jungmeyer told reporters that distributors of Mexican produce are fearful of antidumping duties on Mexican tomatoes.

“We feel (dumping charges) are unfounded. Growers haven’t been selling to the U.S. market for years by selling below the cost of production,” Jungmeyer said.

Jungmeyer said distributors suspect that if the tomato suspension agreement is terminated, as the Department of Commerce is contemplating, a new round anti-dumping investigations would begin shortly thereafter.

“If this is not renegotiated to the satisfaction of both the Department of Commerce and Mexican growers, it will put the United States and Mexico on a collision course that would have disruptions in trade all around,” he 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.