The Department of Commerce has terminated the 2013 Suspension Agreement on Fresh Tomatoes from Mexico, setting a 17.56% duty on Mexican tomatoes arriving in the U.S.
However, Commerce Secretary Wilbur Ross said he was “optimistic” a new deal can be struck.
Negotiations will continue on a revised agreement, according to a Commerce Department news release.
Any new deal must be acceptable to the Mexican signatories (growers) and also address concerns of the U.S. industry “to the extent permissible by U.S. trade law,” according to the release.
The department announced its intentions to set aside the suspension agreement on Feb. 6, although negotiations have continued since then.
Commerce will restart an anti-dumping investigation that the suspension agreement set aside, and instruct Customs and Border Protection to collect cash deposits or bonds of 17.56%, a number set by Commerce in 1996. The release said any deposits collected will be refunded if a revised agreement is reached, or the U.S. International Trade Commission (ITC) determines there is no injury based on its own independent investigation.
“The Department of Commerce remains committed to ensuring that American domestic industries are protected from unfair trading practices,” Secretary of Commerce Wilbur Ross said in the release. “We remain optimistic that there will be a negotiated solution.”
On Nov. 14 last year, representatives of the domestic tomato industry requested that the Department of Commerce terminate suspension agreement. On Feb. 6, the Commerce Department notified the Mexican signatories that it intended to withdraw from the agreement, with a 90-day notice required by the agreement.
If the Commerce Department finds that sales of Mexican tomatoes are made at less than fair value in its final determination, the International Trade Commission will conduct its own investigation. If Commerce and the ITC agree that Mexico is dumping tomatoes into the U.S. market, another duty will be established.
Commerce, which opened negotiations with the Mexican tomato industry in January 2018, continues those discussions, according to the release.
Should an agreement be reached, Commerce and the Mexican signatories could enter into a new agreement, subject to a 30-day notification period, according to the release.