Negotiations on a new tomato suspension agreement were stuck in neutral in early August, with a danger of slipping into reverse.
Three months after the U.S. pulled out of the last agreement, Mexican tomato growers put forward a new proposal Aug. 5 for a tomato suspension deal with the Department of Commerce.
The Fresh Produce Association of the Americas said an earlier proposal from the Department of Commerce trampled on the rights of U.S. buyers and sellers of Mexican tomatoes to claim damages for breach of contract, which the group said are protected under U.S. law, including the Perishable Agricultural Commodities Act.
In addition, the FPAA stated any new suspension agreement must remove the proposal by the Department of Commerce that stipulates every imported lot of Mexican tomatoes must be inspected on entry to the U.S. The suspension agreement between Mexican growers and the department ended May 7, after which the U.S. imposed a 17.56% duty on imports that remains in effect.
Can’t go for that
The Mexican tomato growers’ proposal was met with a bucket of cold water by the Florida Tomato Exchange.
In addition, Sen. Marco Rubio, R-Fla., criticized the tactics employed by Mexican tomato growers.
“The fact remains that the Mexicans have avoided serious negotiations for well over a year, preferring to use scare tactics and inflammatory rhetoric to try to force President Trump and Secretary Ross to back down on their commitment to ensure that American tomato growers are able to fairly compete in our own domestic market,” Rubio said in a news release.
Rubio said if Mexican growers do not compromise on a mutually beneficial agreement, he looks forward to the issue being resolved in September when U.S. trade law enforcement can reach a conclusion on what he says “is clear and convincing evidence of produce dumping and injury.”
In response, Lance Jungmeyer, president of the Nogales, Ariz.-based Fresh Produce Association of the Americas, said Rubio earlier had pressured the Department of Commerce to terminate the tomato suspension agreement.
“It is ironic that Sen. Rubio wants Commerce to complete its internal process for an anti-dumping investigation, because the senator earlier this year used political pressure to derail another internal process at Commerce,” Jungmeyer said in an e-mail.
Instead of letting the department complete an administrative review of the tomato suspension agreement — a review that Mexican tomato interests believe would have shown the agreement was functioning as intended — Rubio sent a letter to the Department of Commerce asking it to terminate the agreement and instead re-open the anti-dumping investigation, Jungmeyer said.
“Commerce responded to the political pressure, and now here we are, with consumers paying more for tomatoes and the U.S. and Mexico careening toward a trade conflict,” Jungmeyer said.
For the first two months without the tomato suspension agreement with the U.S., both volume and value of U.S. imports of Mexican tomatoes have fallen below year-ago levels.
U.S. Department of Agriculture trade statistics show that combined U.S. imports of Mexican tomatoes in May and June totaled 274,000 metric tons, down 6% from the same two months in 2018.
By value, combined U.S. imports of Mexican tomatoes in May and June were about $242 million, down 20% from $304 million in the same two months a year ago.
“By recklessly blurring the history of Mexican tomato importation into the U.S., Sen. Rubio is trying to distract us from how the commerce department’s recent decisions threaten to turn the U.S. tomato market into a tailspin that will primarily benefit the FTE,” Jungmeyer said.
Michael Schadler, executive vice president of the Florida Tomato Exchange, said that Mexican growers are “acting as if they are being forced into something against their will.”
“They are an equal party in the negotiations and don’t have to agree to anything the DOC proposes,” he said.
“If the Mexican growers and the DOC can’t agree on what that looks like, then the anti-dumping investigation should simply run its full course without yet another suspension,” he said.