U.S. authorities to review Mexican trade agreement
The U.S. Department of Commerce has responded to pressure from the domestic tomato industry by announcing it would review the existing antidumping suspension agreement with Mexico, which has governed the price of the country’s vine-ripened tomatoes for 16 years.
The initial proposed agreement was signed on Oct. 10, 1996 as a means to put an end to investigations into the trade practices of Mexican exporters, but around two weeks later it was deemed the fruit was being sold at less than fair value (LTFV)
However, on the same day an agreement to suspend investigations was signed between the Department and certain Mexican growers and exporters.
The agreement has been re-signed several times since then, but this year petitioners from Florida, South Carolina, California, Georgia, Tennessee, Pennsylvania and Virginia called for a withdrawal of these suspended dumping cases, which could open the door to new investigations.
The department announced a ‘changed circumstances review’ in yesterday’s Federal Register and will be accepting comments until Sep. 4., but it has not yet indicated it will terminate the agreement.
“Although the petitioners request that the Department immediately terminate the suspended investigation without further comment or consideration based on their withdrawal of the petition, the Department has determined that a changed circumstances review is warranted,” the department said,.
“The Tariff Act of 1930, as amended…explicitly provides seperate and distinct mechanisms for termination of an ongoing investigation (by withdrawal of the petition or indication of a lack of interest) and a suspended investigation (through an administrative review or changed circumstances review).”
The petitioners cited three cases to support their request, involving imports of non-agricultural products from Hungary, Japan and Singapore, but the department deemed these did not set precedents for the tomato agreement matter.
“Each of these cases is distinguishable from the present circumstances.”
The Fresh Produce Association of the Americas claims the move has been pushed by special interest efforts, urging the government to consider the agremeent has ensured an abundant choice of fresh tomatoes at stable prices for millions of U.S. consumers.
“Special interest groups are using election-year politics to try to start a trade war that will disrupt a 16-year track record of success for bringing fair prices to consumers and healthy variety to family dinner tables,” said the association’s president Lance Jungmeyer.
“In this economy, the last thing we need is a trade war with our second largest trading partner that hits American families in the pocketbook.”
U.S. officials have expressed concern that if Florida’s special interests are successful in convincing the administration to end the tomato trade agreement, Mexico could retaliate.
Last week, four U.S. politicians – senator John McCain, senator Jon Jyl, congressman Jeff Flake and congressman Paul Gosar – sent a letter calling on acting commerce secretary Rebecca Blank not to derail the agreement.
“First, an abrupt termination of the suspension agreement would have a chilling effect on agricultural trade with Mexico – our third largest trading partner,” the letter said.
“The U.S. agricultural sector has been a rare bright spot in an otherwise dim economic landscape, with a record-setting level of farm exports factoring prominently in that success. Stable U.S.-Mexico commercial policy is critical to our national economy and to the economies of many states (both border and non-border).
“Granting this termination would also likely lead to more protectionism and, ultimately, less trade. Indeed, those requesting this action could simply press for a new investigation in hopes that a higher level of protection could be gained for the domestic tomato industry.”