Agricultural News
Tomato Trade War Averted by US and Mexican Governments
Sun, 03 Feb 2013 17:47:25 CST
The United States and Mexico have reached a tentative agreement on cross-border trade in tomatoes, narrowly averting a trade war that threatened to engulf a swath of American businesses.
The agreement, reached late Saturday, raises the minimum sales price for Mexican tomatoes in the United States, aims to strengthen compliance and enforcement, and increases the types of tomatoes governed by the bilateral pact to four from one.
"The draft agreement raises reference prices substantially, in some cases more than double the current reference price for certain products, and accounts for changes that have occurred in the tomato market since the signing of the original agreement," Francisco Sanchez, the United States under secretary of commerce.
The agreement will be open for public comment until Feb. 11. The Commerce Department estimated it would go into effect on March 4.
Estimates are that nearly half of tomatoes eaten in the United States come from Mexico. Last fall Florida tomato growers asked the Commerce Department to intervene and end a 16-year-old agreement that had suspended an antidumping investigation that began in the mid-1990s. The agreement had been amended several times over the years, but Florida growers contended it set the minimum price of Mexican tomatoes so low that the Florida growers could not compete.
Agriculture Secretary Tom Vilsack issued the following statement on the proposed agreement by the U.S. Commerce Department and the Mexican tomato industry suspending the antidumping duty investigation of fresh tomatoes from Mexico.
"I applaud the good work of Undersecretary Sanchez and the Commerce Department to forge this important agreement to allow our domestic tomato industry to compete on a level playing field. The draft agreement meets the requirements of U.S. antidumping law and provides an effective remedy for our domestic tomato producers, further bolstering agriculture as a bright spot in our nation's economy. Ultimately, the Obama Administration forged an agreement that will restore stability and confidence to the U.S. tomato market and ensure fair trade in fresh tomatoes through increased reference prices, coverage and strengthened enforcement. The United States is one of the world's leading producers of tasty, high-quality tomatoes. Our U.S. fresh and processed tomatoes account for more than $2 billion in cash receipts and support thousands of American jobs in our food industry, shipping, processing and more."
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