The U.S. has announced plans to unilaterally withdraw from the tomato suspension agreement with Mexico by May 7, 2019. In the meantime, negotiations may continue. According to the RaboResearch report, Tomato Fight: What Is at Stake?, if parties reach a renewed suspension agreement, specific conditions may change, and the withdrawal would be avoided.
As half of the fresh tomatoes consumed in the US come from Mexico, potential changes to international trade would have relevant implications – not only for growers, but also for shippers, retailers, and consumers, says David Magaña, Senior Analyst – Fresh Produce. “Specific implications for the players along this highly integrated value chain would depend on the nature of the potential outcome.”
If there is no new suspension agreement by May 7, a temporary anti-dumping duty of 17.5% would be imposed on US importers of Mexican tomatoes. In addition, the US government would resume the anti-dumping duty investigation initiated in 1996.
Later, the US International Trade Commission would publish a determination on whether or not the US tomato industry was harmed due to tomato imports from Mexico. If it finds substantial harm, an updated anti-dumping duty would be determined. However, if no harm is determined, all restrictions to trade for fresh tomatoes would have to be removed.
To read the full report by Rabobank (for Rabobank clients), click here.