The planned termination of the 2013 Suspension Agreement on Fresh Tomatoes from Mexico has prompted a range of reactions in the produce industry.
Ending the agreement allows the U.S. Department of Commerce to resume its long-dormant investigation into allegations that Mexican tomatoes are being dumped onto the U.S. market.
The Florida Tomato Exchange, which filed an antidumping suit against Mexican producers more than 20 years ago, is happy with the news, said executive vice president Michael Schadler. The Fresh Produce Association of the Americas, which represents importers of Mexican produce, is disappointed, said FPAA president Lance Jungmeyer.
The U.S. plans to formally withdraw from the agreement May 7. In the meantime, the terms of the deal are still binding on buyers and sellers.
Jungmeyer said the FPAA recommends that the U.S. and Mexico continue to work toward a new agreement. Schadler said the Florida Tomato Exchange — along with producers elsewhere in the U.S. — is also open to further negotiation. However, Schadler was not optimistic that the U.S. and Mexico would come to a deal acceptable to both sides.
“Based on the last year of precedent, we don’t really have that high of expectations, but whether or not this latest announcement on the termination effective May 7 changes something as far as the motivation to negotiate in a more meaningful way by our Mexican counterparts, I don’t know,” Schadler said Feb. 8. “Truly the ball is in their court, and I can’t anticipate how they might react, but certainly things have changed with this announcement, so perhaps we will see a different kind of reaction and negotiating stance from their side.”
The Florida Tomato Exchange contends that dumping has continued even under the agreement and harmed the domestic industry. The FPAA disputes that rules are not being followed.
“The tomato suspension agreement has brought stability to the U.S. tomato market for over two decades, and it has been updated as the market has evolved,” Jungmeyer said in a news release. “These updates have resulted in a wide selection of fresh tomatoes for U.S. consumers, while complying with U.S. trade laws, and adding enforcement mechanisms as the agreement itself has evolved. Despite Florida’s rhetoric, the record has shown that both Mexican growers and U.S. distributors have complied with the rules of the agreement.”
Jungmeyer argues that the interests of Florida growers extend beyond import prices.
“They are seeking to have second, third and fourth sales covered under the minimum price, including handling and freight charges,” Jungmeyer said in the release. “This is clearly outside of the scope of the law and is intended to discourage U.S. businesses from selling Mexican tomatoes.”
The position of the domestic tomato industry — including producers in California, Michigan and New Jersey — is that the current agreement doesn’t work.
“The biggest thing is just the structure of the agreement has to be enforceable, and there can’t be loopholes to allow dumped tomatoes into the market,” Schadler said. “Of course the current agreement looks pretty good on paper, but it just hasn’t worked because ... the tomato industry and the produce industry in general is a very creative bunch where they can find how to circumvent the agreement, so there has to be either a stronger enforcement mechanism or a different kind of structure to make sure that dumped tomatoes can’t get into the market — because that’s the point of the suspension agreement.”