Tomato Suspension Agreement graphic ( The Packer )

By Jim Offner

With a new tomato suspension agreement now affirmed by the U.S. International Trade Commission, the industry hopes it can achieve some pricing stability for its product.

That is, if it enforced, some suppliers say. 

In a decision that will keep in place the tomato suspension agreement between Mexican growers and the Department of Commerce, the ITC ruled that Mexican tomatoes sold at less than “fair value” threaten the domestic industry. 

On Nov. 22, the ITC voted 4-0 that the U.S. tomato industry is threatened by imports of fresh tomatoes from Mexico, agreeing with the Commerce Department that they are sold in the U.S. at less than fair value, according to a news release from the commission.

So, a suspension agreement Commerce signed with Mexican tomato growers in September remains in effect. 

“These rulings validate the U.S. industry’s long-held claims about dumped Mexican tomatoes,” according to a news release from the tomato exchange. 

“The Florida Tomato Exchange hopes that this new reality will instill discipline among exporters and importers of Mexican tomatoes so that they will not attempt to circumvent the rules of the suspension agreement,” according to the release.

A new suspension agreement was signed in late September after more than a year of negotiations, but the U.S. Department of Agriculture border inspections — which are part of the new agreement — won’t begin until late March 2020, said Michael Schadler, executive vice president of the Maitland-based Florida Tomato Exchange and manager of the Florida Tomato Committee.

He offered comment Nov. 13 on the assumption that the ITC would uphold the new suspension agreement.

“Other new elements of the agreement are still being implemented as the industry digests the changes and the Commerce Department gets up to speed with administration and enforcement,” Schadler said. “The real test will begin in January when the large Mexican volume begins.”

Border inspection is a key component to the new agreement, said Tony DiMare, vice president of Homestead, Fla.-based grower-shipper DiMare Co.

“The new tomato suspension agreement is in force now; however, the border inspection component has not been implemented yet,” he said. “USDA (the U.S. Department of Agriculture) is in the process of hiring and training additional inspectors for the projected implementation sometime in March of 2020.”
As it relates to pricing, it is too early to tell yet, DiMare said.

“Mexico has not yet come into their normal seasonal volume, which should start increasing in December and hit their peak volumes after the first of the year through April,” he said.

The suspension agreement is “a good tool” for the industry, when its parts are enforced, said Bob Spencer, president of Palmetto, Fla.-based tomato grower-shipper West Coast Tomato LLC.

“We have operated for 23 years with agreements that didn’t work because there was no enforcement mechanism,” he said. 

“We’ve seen the effects in Florida, with products being dumped in the U.S. with no recourse to punish those who were guilty. We feel, with the agreement, we have a better tool of uncovering those who are not abiding by the agreement.”

That’s good for everybody, Spencer said.

“There were enough who didn’t abide with it that it affected our bottom line,” he said. “Just also forcing everything coming in to the U.S. to get an inspection will curtail those who want to ship in inferior product that really shouldn’t be in the market. You’ll have less cheaper product dragging down the overall market.”

Enforcement is the key to success of any suspension agreement, said Michael Melninkaitis, director of operations for the Plainville, Conn.-based Northeast Produce Inc. and owner of Immokalee, Fla.-based Immokalee Produce Shippers Inc. 

Related content:
Florida Tomato Exchange wants antidumping investigation to resume
Tomato leaders spar before the International Trade Commission
Tomato negotiations sour

 
 
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