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U.S.-Mexico trade war over tomatoes appears to have been averted

The draft of a new agreement governing the price of tomato imports from Mexico sets a minimum wholesale price for tomatoes.

February 03, 2013|By Ricardo Lopez, Los Angeles Times
  • The U.S. and Mexico averted a tomato trade war after the Commerce Department released a draft of a new trade agreement Saturday governing the prices of imported tomatoes. Above, tomatoes are sold in a New York City grocery store.
The U.S. and Mexico averted a tomato trade war after the Commerce Department… (Mario Tama/Getty Images )

American and Mexican tomato growers appear to have avoided a trade war — the U.S. Commerce Department has released a draft of an agreement governing the price of tomato imports from Mexico.

U.S. growers in Florida had accused their Mexican counterparts of selling their tomatoes below fair market value, a practice known as dumping.

The new agreement, which sets a minimum wholesale price for tomatoes, would replace a trade pact that went into effect 17 years ago.

Francisco Sanchez, the undersecretary of commerce for international trade, said in a statement Saturday that the agreement puts in place "robust enforcement that will allow American workers and the U.S tomato industry to compete on a level playing field."

In the last decade, U.S. growers found themselves competing heavily with Mexico. That country's exports of tomatoes to the U.S. reached $1.81 billion in 2011, more than quadruple the $412 million in 2000.

Eager to continue exports and sales of their tomatoes, Mexican tomato growers and importers worked with Commerce Department officials on drafting an agreement.

The plan, open to public comment until Feb. 11, would raise the wholesale price for tomatoes and strengthen anti-dumping enforcement.

One provision of the agreement, expected to take effect March 4, creates a reporting mechanism to monitor the price of production by Mexican growers.

Martin Ley, a Mexican tomato grower involved in the negotiations, said the agreement was made possible by steep concessions on the part of Mexican tomato producers.

"Getting to this moment no doubt required significant compromise by the Mexican growers," he said in a statement. "Even though no dumping or injury to the U.S. industry was demonstrated by our competitors, over the last year our growers worked with our government to overhaul the whole Mexican industry, broaden the coverage and develop tough enforcement schemes.

"While concessions on price will impose hardships on our industry, we are hopeful that over the long run we will be able to continue to supply the United States with what are acknowledged to be the best tomatoes in the market."

Late last month, a study, paid for by a Mexican tomato trade group, predicted that the price of winter tomatoes would have doubled if Mexican imports were excluded from the U.S. market. The study, released by the Fresh Produce Assn. of the Americas, projected that the price of hothouse round tomatoes, for instance, would have risen from $2.02 a pound to almost $4 a pound.

U.S. growers appeared to back the agreement but held firm to their assertion that Mexico was dumping its tomatoes.

With the agreement, "we're hopeful and optimistic that we'll be able to compete under fair trade conditions," Edward Beckman, president of Certified Greenhouse Farmers, said in a statement. "Much work remains to have the agreement fully and faithfully implemented, and continuous monitoring and enforcement will be critical."

ricardo.lopez2@latimes.com

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