Mexican growers have signed an agreement with the Commerce Department that raises the prices of the tomatoes they sell in the United States but drops the threat of a 25 percent U.S. anti-dumping duty.
“The agreement was hard-fought, but we were able to secure a number of important provisions that will make this deal work for our distributors and customers,” Mario Robles, director of the Sinaloa growers association, said in a statement.
The Commerce Department, in its own statement, said the agreement eliminates the injurious effects of unfairly priced Mexican tomatoes, prevents price suppression and undercutting and allows department officials to audit at least 80 Mexican tomato producers and U.S. sellers every three months to ensure compliance.
The agreement also closes loopholes from past suspension agreements that permitted sales below the minimum “reference prices” in certain circumstances and includes an inspection mechanism to prevent the importation of low-quality, poor-condition tomatoes from Mexico, which can have price-depressing effects on the market, the department said.
Heading into final talks this week, Mexican tomato growers were threatening not to sign the agreement because of concern over a new border inspection procedure.
U.S. companies that import about $2 billion of Mexican tomatoes annually also warned Wednesday the requirement could cause costly border delays. That would also affect other incoming produce such as table grapes, avocados, onions and citrus that require inspection under USDA marketing orders, Lance Jungmeyer, president of the Fresh Produce Association of the Americas, said in an interview.
However, the Mexican growers said Thursday they won a commitment that inspections will be conducted by the USDA in accordance with its normal practice, including being done in a timely manner and completed within 24 hours.
Commerce also committed that the inspection program — which does not take effect for at least six months — will be developed and implemented in consultation with experts at USDA, the growers said.
“These provisions help relieve our concerns that the United States was setting up a de facto quota or volume restriction,” said Rosario Beltran, president of the grower association CAADES. “We hope these provisions will give comfort to the many interests in both countries concerned about bottlenecks at the border and supply chain delays.”
The Mexican growers said they were also able to preserve the ability to sell directly to U.S. retailers and protect the rights of U.S. buyers to seek damages when the product they receive does not meet specifications.
“We take the Department of Commerce at its word that the agreement is not designed to impede trade and we thank the Department’s team for working with us to make important changes to the agreement in the last 30 days,” said Antonio Gandara, president of the Sonora growers association.
The so-called suspension agreement ends a two-decade-old anti-dumping investigation that the Commerce Department relaunched in May at the request of Florida tomato growers. Commerce set a preliminary anti-dumping duty of 17.5 percent on the imports, which was scheduled to increase to 25 percent if no deal was reached.
“The department’s action brought the Mexican growers to the negotiating table and led to a result that protects U.S. tomato producers from unfair trade. It also removes major uncertainties for the Mexican growers and their workers,” Commerce Secretary Wilbur Ross said in a statement.
Oscar Woltman, president of AMHPAC, Mexico’s largest growers’ association, said the final agreement is much better than initial demands made by the Florida Tomato Exchange, which represents the industry in that state.
“Considering that we started the negotiations with Commerce with the Florida Tomato Exchange demanding that the reference prices should be extended downstream to the final sale and that U.S. buyers be stripped of legal rights, we believe we have ended up in a much better place,” Woltman said.
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