Wal-Mart throws weight behind tomato suspension pact

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Wal-Mart throws weight behind tomato suspension pact

Wal-Mart is the latest big hitter to come out in support of the U.S.'s 16-year-old tomato agreement with Mexico, claiming if the arrangement is scrapped it could spark a trade war costing the American economy billions of dollars in exports.

The retail giant has written to the U.S. Commerce Department calling for the agreement to be kept.

"Termination of the tomatoes agreement will benefit no one and will lead only to uncertainty and unpredictability in the market," it said.

The U.S. Chamber of Commerce has also written to acting Commerce Secretary Rebecca M. Blank presssing for the agreement to be kept.

"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," it said in its letter.

The National Restaurant Association (NRA) and nearly a dozen meat, dairy and poultry producers' organizations have also thrown their weight behind the campaign.

"Unpredictable, and possibly higher tomato prices could negatively impact industry operations," said the NRA. It added that the U.S. food and restaurant industry accounts for more than one-third of all the tomatoes consumed in America.

The U.S. Department of Commerce is currently reviewing the agreement following pressure from Florida's tomato growers to end the pact, which has governed the price of imported Mexican vine-ripened tomatoes since 1996.

The Tomato Suspension Agreement has widely been viewed as keeping tomato prices on a fair footing in the marketplace by setting guidelines for Mexican tomato prices.

The Fresh Produce Association of the Americas claims Florida's growers are trying to bypass the agreement's legal requirements by calling for its abolition.

The association claims the existing agreement has allowed consumers great tomato choice particularly in the winter with vine-riped Mexican tomatoes available in U.S. stores.

It maintains many U.S.-grown winter tomatoes, including those from Florida, are picked green and treated with gas that later turns them red for sale in supermarkets.

Last year the U.S. shipped US$1.04 billion in pork to Mexico and has created over 9,000 U.S. jobs, according to National Pork Producers Council president  R.C. Hunt.

"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 U.S.$18 within the first year. This coupled with record high feed costs would devastate our industry."

Democrat congressman for Arizona Raul M Grijalva has also lobbied the Commerce Department to keep the agreement.

"The US$100 billion U.S. produce market is now globally integrated, and up to US$7 billion of the industry is comprised of fruits and vegetables from Mexico, affecting tens of thousands of U.S. workers."

Related stories: U.S. authorities to review Mexican trade agreement

Florida's tomato trade threats 'dangerous' for U.S., Mexican economies


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