U.S.'s proposed Mexican tomato deal 'invites antitrust concern', says FPAA

August 08 , 2019

The Tomato Suspension Agreement proposed by the U.S. Department of Commerce in July has deeply flawed provisions, according to the Fresh Produce Association of the Americas (FPAA).

The group said those provisions "infringe upon federal laws and are unlikely to survive antitrust and other legal actions that are sure to arise".

However, it believes that the Mexican growers' proposal from August 5 "identifies a path forward that greatly reduces FPAA’s antitrust concerns" and "deserves full consideration by Commerce", said FPAA president Lance Jungmeyer.

“We have made two trips to Washington to meet with the Department of Commerce to explain how the Commerce proposal gives unfair advantage to one type of U.S. seller of Mexican tomatoes over other U.S. sellers of Mexican tomatoes, yet the unjustifiable provisions remain,” said Jungmeyer.

“The Commerce proposal would allow repackers to profiteer on the condition of Mexican tomatoes at destination. By contrast, the new Mexican proposal provides a clear path to remove defective tomatoes from the marketplace. This is a step in the right direction.”

FPAA believes that Commerce is going "beyond its statutory authority" - particularly with sales price adjustments for defective tomatoes.

It says Commerce's proposal " tramples on the rights of U.S. buyers and sellers of Mexican tomatoes to claim damages for breach of contract", which are protected under U.S. law, including the Perishable Agricultural Commodities Act (PACA).

Addressing another provision, FPAA firmly believes a new suspension agreement must remove the mandate for USDA to inspect every imported lot of Mexican tomatoes, an action that the Mexican government has said would invite reciprocal inspections on U.S. agricultural products.

Indeed, inspections of Mexican tomatoes would "accomplish nothing", it said. This is because USDA records show that 99% of tomatoes meet standards upon arrival at customers’ warehouse, it explained.

FTE says Commerce's proposed Mexican tomato deal "a good starting point"

The Florida Tomato Exchange (FTE) in July welcomed Commerce's proposal, saying it would protect domestic farmers from dumped Mexican tomatoes.

"The Department’s July 17 proposal is a good starting point to resume negotiations with the Mexican industry," the group said.

"The proposal moves negotiations forward on a constructive basis by recognizing the need for a more enforceable agreement. A robust and enforceable structure is the only way the domestic industry will be able to support a new suspension agreement."

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