An influential group of businesses, agricultural and food industry organizations warn that special interest efforts to abolish a 16-year U.S. tomato agreement with Mexico could lead to a trade war costing the American economy billions of dollars in exports and tens of thousands of jobs.
A growing number of industry leaders, including the U.S. Chamber of Commerce, National Restaurant Association, Wal-Mart and nearly a dozen meat, dairy and poultry producers’ organizations, is asking the Obama Administration to continue the long-standing agreement with one of America’s largest trading partners.
“A potential trade disruption with Mexico could have a devastating impact on U.S. farmers, manufacturers, and service providers and their employees who collectively export hundreds of billions of dollars in goods and services annually to Mexico,” the U.S. Chamber of Commerce wrote in a letter to Acting Commerce Secretary Rebecca M. Blank supporting continuation of the tomato agreement.
The U.S. Department of Commerce currently is reviewing the trade agreement in response to Florida tomato growers using election-year politics to end the pact that has governed the price of imported Mexican vine-ripened tomatoes since 1996. That trade pact, known as the Tomato Suspension Agreement, has kept the prices of Mexican and American tomatoes on fair footing in the marketplace by setting guidelines for Mexican tomato prices. The Florida growers are trying to circumvent the legal requirements of the agreement by demanding that it be terminated immediately, hoping that the administration will bow to political pressure during a close election instead of following the provisions of the agreement.
The agreement has also allowed consumers greater tomato selections, particularly in winter months when the vine-ripened Mexican tomatoes are available in U.S. stores. Many U.S.-grown winter tomatoes, including those grown in Florida, are picked green and treated with a gas that later turns them red for sale in supermarkets.
“Termination of the tomatoes agreement will benefit no one and will lead only to uncertainty and unpredictability in the market,” Wal-Mart officials wrote to the Commerce Department.
The National Restaurant Association, the leading business organization for the restaurant and food service industry, wrote, “Unpredictable, and possibly higher tomato prices could negatively impact industry operations.” The U.S. food and restaurant industry accounts for more than one-third of all the tomatoes consumed in America, according to the trade group.
Agricultural groups representing meat, dairy and poultry producers say they are concerned about impact of a trade war on jobs and their industries.
Last year, the U.S. shipped $1.04 billion in pork to Mexico and has created over 9,000 U.S. jobs, according to R.C. Hunt, president of the National Pork Producers Council. “These jobs will be at risk if a trade war breaks out as a result of the termination of the suspension agreement. If the U.S. pork industry were to lose the Mexican market, U.S. live hog prices would fall by $18 within the first year. This coupled with record high feed costs would devastate our industry.”
“The $100 billion U.S. produce market is now globally integrated, and up to $7 billion of the industry is comprised of fruits and vegetables from Mexico, affecting tens of thousands of U.S. workers,” Raul M. Grijalva (D-AZ) wrote in a letter to the Commerce Department. “Ending this agreement will put people out of work, reduce the variety and quality of tomatoes available to consumers and hurt all Americans by raising prices at the supermarket check-out line.”
Click here to view full letters from organizations and leaders supporting a continuation of the tomato pact.
For more information please visit www.savemytomato.com
Source: Fresh Produce Association of the Americas