Tomato growers across Mexico are united in their opposition to efforts by some U.S. tomato growers to bring down the agreement that has brought stability to the market for sixteen years. CAADES Sinaloa, A.C., Consejo Agrícola de Baja California, A.C., Asociación Mexicana de Horticultura Protegida, A.C. (AMHPAC), Union Agricola Regional de Sonora Productores de Hortalizas Frutas y Legumbres, Confederacion Nacional de Productores de Hortalizas, and Mexico’s Sistema Producto Tomate issue this combined statement in response to this recent action.
On June 22, 2012, the Florida Tomato Exchange asked the U.S. Department of Commerce to terminate the bilateral agreement with the Mexican tomato growers so that they could immediately file a petition for a new investigation. “We are disappointed,” said Rosario Beltran, Chairman of CAADES’ Commission for Research and Defense of Horticultural products (CIDH). “This agreement has worked well for 16 years, bringing stability to the market and settling one of the largest bilateral trade disputes between the United States and Mexico. If these Florida growers are successful in reigniting this trade war all over again, it will have an enormous negative impact on industries on both sides of the border and prices will increase significantly for U.S. consumers.”
The original agreement, between the U.S. Department of Commerce and Mexican tomato growers, went into effect on November 1, 1996, and suspended the antidumping investigation that was ongoing at that time. The agreement established a minimum price, set by the Department of Commerce, under which the Mexican growers agreed not to sell in the U.S. market. Since that time, the Agreement has been renegotiated and renewed in 2002 and 2008. On all three occasions, the Department of Commerce made determinations that the agreement completely eliminates any injurious effect of Mexican tomato imports, prevents the price suppression or undercutting in the U.S. market and, most importantly, is in the public interest. Nothing has changed. The record of the proceeding reflects no complaints or allegations that the agreement has been violated. “The agreement is working for everyone—U.S. growers, Mexican growers and U.S. consumers, who otherwise would have been the victims of arbitrary price increases and suffered at the supermarket check-out line,” said Manuel Cazares, Chairman of Mexico’s Sistema Producto Tomate.
During the last 16 years, growers from Mexico have worked closely with the Department of Commerce to improve the efficacy of the agreement. Specifically, Mexican growers and Department of Commerce have collaborated to increase signatories, increase enforcement, increase the reference price, and educate growers, distributors and buyers. Moreover, the agreement has built-in mechanisms to address exactly the type of concerns Florida expresses in the recent press release. “If Florida or other U.S. growers had these concerns, why didn’t they avail themselves of any of these opportunities?” asks Mario Robles, President of CIDH; “Why are they instead pursuing termination? One reason – they just want to use political pressure to start a new antidumping investigation and demand protection from fair competition. Just as it did 16 years ago, Florida is trying to hijack the proceeding in the middle of a U.S. Presidential election, starting a trade war with Mexico and demanding a tax on U.S. consumers in the process.”
“The economic pressures cited by the Florida growers are their own doing – instead of innovating and evolving, they rely on outdated technology and grow tomato varieties no longer popular with U.S. consumers,” said Manuel Valladolid of Consejo Agricola de Baja California. In contrast, in Mexico, as well as other parts of the world, the tomato industry has invested in technology, has evolved into diverse growing areas, and has cultivated a greater selection of tomato varieties that are distinguished as more flavorful and appealing to consumers. “We have followed the call of the industry and consumers to supply a better tomato, explained Eric Viramontes, President of AMHPAC. “Florida chose not to do so. Instead, they continue to seek government protection to compensate for their decisions not to innovate and diversify. This protection will be in the form of an added tax at the grocery store for all U.S. tomato consumers,” he notes.
The Mexican growers prefer to avoid this and continue the collaborative approach that has been successful for 16 years. As a legal matter, they have filed their formal opposition to this action on July 5, 2012, arguing that the agreement is in the best interests of growers, consumers and the U.S. Government and that the U.S. growers have not met the statutory burden for termination.
Contact: Mario Robles at (667) 716-6499
BILATERAL AGREEMENT ON MEXICAN TOMATO IMPORTS FACT SHEET
- The bilateral agreement suspending the antidumping investigation on Mexican tomato imports has been in effect since November 1, 1996. The agreement is between the Mexican growers and the U.S. Department of Commerce. Under the agreement, Mexican growers agree to sell in the United States at or above a fixed reference price. The agreement has been renewed twice – in 2002 and 2008.
- In suspending the antidumping investigation, the Commerce Department found that (1) extraordinary circumstances were present; (2) the agreement completely eliminated the injurious effect of any Mexican tomato imports; (3) the agreement prevented the suppression or undercutting of U.S. price levels by imports; (4) the agreement was in the public interest. These four determinations are required by U.S. law in order for the Commerce Department to suspend an investigation.
- With regard to determining the agreement was in the public interest, the Commerce Department found that the agreements over time have (1) eliminated the injurious effects of exports of the subject merchandise to the United States; (2) created stable and predictable trade; (3) benefited “traders and consumers” by increasing market certainty and price stability; (4) conserved the Department’s, domestic industry’s, and Mexican producer’s resources; and, (5) been in the U.S. international economic interest by reducing significant trade tensions with Mexico.
- The agreement covers all fresh tomato varieties, whether produced by the U.S. growers or not.
- All Mexican tomatoes entering the U.S. market are at or above a price determined by the Commerce Department to completely eliminate the injurious effect of any dumping.
- Volumes are not restricted. Under the agreement, Mexican producers may ship any quantity, as long as they are priced at or above the reference price set by the Commerce Department. U.S. consumption of tomatoes has grown since 1996, also total value of all fresh tomatoes in 2011 is more than double the value in 1996. U.S. growers have not been able and continue not to be able to meet U.S. demand, both overall and for specific varieties not grown by the U.S. producers but still covered by the agreement.
- The agreement includes numerous mechanisms to address any potential concerns including the level of the reference price, coverage, possible circumvention, possible violations, or a general review of the functioning of the agreement. Over the sixteen years the agreement has been in effect, the U.S. growers have not availed themselves of any of these opportunities, nor have they filed any complaints or allegations of violations on the record of the proceeding. The Commerce Department has not initiated any formal investigation under the terms of the agreement and has not made any findings of violations or other issues. There is no indication that the agreement is not working.
Source: CAADES Sinaloa, A.C., Consejo Agrícola de Baja California, A.C., Asociación Mexicana de Horticultura Protegida, A.C. (AMHPAC), Union Agricola Regional de Sonora Productores de Hortalizas Frutas y Legumbres, Confederacion Nacional de Productores de Hortalizas, and Mexico’s Sistema Producto Tomate