There is no peace in tomato land.
With plenty of drama and plot twists, negotiations related to the tomato suspension agreement between Mexican growers and the Department of Commerce are continuing, according to an official with the U.S. agency.
The latest developments include a Nov. 14 request from the Florida Tomato Exchange — a member of the U.S. petitioning industry — to the Department of Commerce to end the agreement suspending an antidumping investigation on fresh tomatoes from Mexico. That would allow the investigation to resume.
Mexican tomato companies increased their U.S. market share from 32% to 54% between 1996 and 2017 — the period of time the suspension agreement has been in place — while the market share for U.S. tomato producers declined from 65% to 40% percent during the same period, according to the tomato exchange.
“The Tomato Suspension Agreement has always had the right intentions, but it simply hasn’t worked,” the Florida Tomato Exchange said in a late November release. “Over the last 22 years, three different agreements have had to be negotiated because the (exchange) consistently challenged the effectiveness of each agreement. These repeated failures have left the U.S. tomato industry with no choice but to ask the Commerce Department to terminate the agreement.
“Termination is the only course of action that will allow the U.S. industry to finally have its day in court to pursue its antidumping case against the Mexican tomato industry under the U.S. unfair trade laws.”
On Nov. 28, respondents Confederación de Asociaciones Agrícolas del Estado de Sinaloa A.C. (CAADES), Consejo Agrícola de Baja California, A.C., Asociación Mexicana de Horticultura Protegida A.C. (AMHPAC), Asociación de Productores de Hortalizas del Yaqui y Mayo and Sistema Producto Tomate (collectively referred to as the Mexican growers), filed comments with Commerce in response to the Florida Tomato Exchange’s submission.
That submission from Mexico disputes the Florida Tomato Exchange arguments, calling them “baseless claims insufficient to terminate or change agreement.” Mexican tomato growers also said that members of the Florida Tomato Exchange collectively represent the single largest importer and distributor of Mexican tomatoes — importing tomatoes during the same time period it wants to protect, from October through June.
“Moreover, there is nothing in the data that (the exchange) has submitted that indicates it is experiencing any injury, price suppression or price undercutting,” attorneys for Mexican growers wrote to the Commerce Department.
The Department of Commerce requested more information on Florida Tomato Exchange members’ affiliation to Mexican tomato producers, importers and exporters the same day the exchange requested Department of Commerce to withdraw from the agreement, said Martin Ley, president of Nogales, Ariz.-based Fresh Evolution.
Ley said the tomato suspension agreement’s minimum price levels continues to remain in effect while it is being reviewed, and it does not have an expiration date.
The tomato industry in Mexico, the U.S. and Canada has gone through a very significant process of integration, Ley said, noting that nearly every large Florida tomato grower has some type of relationship with Canadian or Mexican tomato suppliers.
“That’s the nature of the industry and that’s one thing we think that is going to (continue) to be a big part of the industry as we move forward,” he said.
It is no secret that some members of the Florida Tomato Exchange handle Mexican tomatoes, said Michael Schadler, executive vice president of the Florida Tomato Exchange.
“Mexico has the majority market share in the United States, so if you are a big player, you’re probably going to handle some Mexican tomatoes,” he said Dec. 6. “If things keep going the way they’re going, those guys who are involved with Mexican tomatoes now will have to be even more involved with Mexican tomatoes.”
Schadler said he hopes that Florida and Mexican tomatoes can be part of a diversified operation.
“The way things are going, it’s going to be all Mexican tomatoes,” he said.
He said the “status quo” is unacceptable and therefore the suspension agreement should be terminated.
“The government should give us our day in court so we can determine whether or not (Mexican tomato growers) are actually dumping and whether or not we’re being injured. That’s all we’re asking,” Schadler said.
According to a Commerce Department spokesperson speaking on condition of anonymity, Commerce is considering submissions from the Mexican growers and the Florida Tomato Committee.
The Commerce Department initiated the latest five-year sunset review in early February and earlier this year indicated it would issue its final results of the sunset review on Dec. 18.