Mexico and U.S. reach deal to end tomato trade war

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Mexico and U.S. reach deal to end tomato trade war

The Mexican tomato industry has reached a deal with the U.S. to avoid an anti-dumping investigation, Mexican Economy Minister Graciela Marquez said on Wednesday.

The development ends a testy tariff dispute that had rumbled on for months.

Under the deal, which will be in place for five years, the vast majority of Mexican tomato exports will be subject to border inspections, Reuters reports.

In May, the U.S. Commerce Department imposed a 17.5% tariff on the country's tomatoes after the two sides failed to renew the Mexican Tomato Suspension Agreement that halted a U.S. anti-dumping probe.

Since then, the two sides have held negotiations in search of a deal.

Marquez said on Twitter the outcome was "good news" that kept the U.S. market open for tomato exporters. The accord between Commerce and Mexican producers had been reached shortly before midnight on August 20.

A “controversial proposal” for tomato trade

A deal needed to be reached by Tuesday night to allow for a 30-day comment period before a Sept. 19 Commerce deadline for completing its anti-dumping investigation.

In a joint statement, several Mexican agricultural associations, including the SPTN tomato producers group, said the accord included a “controversial proposal” to carry out border inspections on 92% of exports for quality control purposes. The Mexican Government described the previous proposal to inspect all tomato imports as "totally unacceptable".

The deal also envisaged raising the reference price of specialty tomatoes, and an increase of 40% in the price of organic tomatoes above that of conventional ones, it said.

The United Fresh Produce Association said in a statement the agreement allows U.S. importers to be reimbursed of cash deposits made since May 7.

"The details of the agreement have yet to be announced, but United Fresh would like to congratulate all of those involved to resolve this matter to bring stabilization back to the tomato marketplace," it said.

"This will be beneficial for the entire distribution chain, most importantly growers and consumers."

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