Florida-Mexico Tomato War enters new phase

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Florida-Mexico Tomato War enters new phase

The Florida Tomato Exchange (FTE) has asked for antidumping duties against Mexican tomato imports into the United States. Based in Maitland, FL, FTE filed a request with the U.S. Department of Commerce to terminate the 2019 Tomato Suspension Agreement. In a June 16 press release, FTE explains the suspension agreement “has failed to stop unfairly traded Mexican tomatoes from destroying the U.S. tomato industry.” 

On June 19, The Fresh Produce Association of the Americas President Lance Jungmeyer responds in writing, “The allegations by the Florida growers are as timeworn and tired as their gassed green tomatoes.” 

The FTE statement notes that, “Since 1996, five different suspension agreements have tried to stop the unfair trade practices used by Mexican tomato exporters, but each agreement has proven to be completely unenforceable.  These repeated failures have made it clear that the Commerce Department must terminate the 2019 Suspension Agreement and impose antidumping duties on Mexican tomatoes, as required by antidumping law.”

Michael Schadler, FTE executive vice president says, “Despite the good faith efforts of the Commerce Department over the last four years, the 2019 Suspension Agreement has not been able to close the loopholes that have always been a problem. It’s become clear that these agreements are simply not enforceable, at least when it comes to the tomato trade with Mexico.  Suspension agreements might be an effective tool for products that can be kept in storage until market conditions improve, but for highly perishable items like fresh tomatoes, there is just too much incentive to evade the reference prices when markets are oversupplied.”

FPAA’s response says, “Duties requested by FTE would limit vine-ripened tomatoes, harm U.S. businesses, and drive up consumer prices in the face of crippling food inflation.”     

More specifically, FPAA, which represents Mexican produce export and import interests, says the FTE’s “asking the Department of Commerce to withdraw from the 2019 Tomato Suspension Agreement jeopardizes the availability of the variety of tomatoes that U.S. consumers expect at prices they can afford and would harm U.S. businesses.  Through these actions, the FTE continues to attempt to use antidumping laws for the unintended purpose of creating a monopoly for themselves in the marketplace and covering for their unwillingness or inability to innovate and adapt to changing market demands.”

FPAA charges, “the FTE has been making the same false claims for years but when pressed to present evidence in regulatory proceedings, they have failed to do so because their claims are untrue, nothing but propaganda intended to skew the political process to their advantage, regardless of the cost to consumers, retailers, and even other American farmers.  The duties that are being sought by the FTE would harm U.S. importers but would ultimately be paid by American consumers who want better tomatoes, not higher prices, reduced varieties, and lower quality tomatoes.”  

Jungmeyer says, “Consumers overwhelmingly prefer the flavor of vine ripened tomatoes over gassed green tomatoes like those from Florida.  Mexico is a major supplier of vine ripened tomatoes which is one reason why the FTE wants to erect a trade barrier. There really is no substitute for a vine ripened tomato, and to put in duties would simply amount to another tax that shoppers just can’t afford.”   

Florida Tomato’s claim is that “suspension agreements are statutorily required to stop injury to the domestic industry caused by dumping.  Unfortunately, none of the suspension agreements covering Mexican tomato imports have met that requirement in the view of FTE.” 

The statistics are telling, the FTE notes: In 1994, the year NAFTA was signed, American tomato farmers supplied about 80 percent of the U.S. market; Mexico accounted for around 20 percent.  June 16, Mexico’s share of the U.S. market is almost 70 percent while U.S. producers have approximately 30 percent.  

In 2019, the Commerce Department determined that Mexico had continued dumping and the International Trade Commission made an affirmative injury determination.  The 2019 Suspension Agreement has failed to reverse the trend, by FTE’s interpretation.  Since 2019, Mexican tomato imports have increased a further nine percent.  Average prices for growers initially rose in the first year after the agreement was signed but have been declining over the last three years as pressure resumed from unfairly traded Mexican imports.  Furthermore, the Commerce Department has documented over 100 examples of how Mexican companies are not complying with the 2019 Suspension Agreement – findings that are based on only a small sample of Mexican exporters.  

“All five suspension agreements over the last 27 years have failed,” in FTE’s view. “They haven’t stopped Mexican tomatoes from being dumped in the U.S. market and haven’t stopped injury to the U.S. industry.  They have proven to be unenforceable and easily violated.  American tomato growers will continue to be driven out of business if suspension agreements are continued to be forced on the industry.  For that reason, we are calling on the Commerce Department to immediately terminate the 2019 Tomato Suspension Agreement and follow the antidumping law.” 

Many Florida growers are in Mexico

 FPAA counters that “FTE is a special interest group whose members have failed to innovate.  What they fail to mention publicly is that many of the largest Florida growers clamoring for protection are also some of the largest financers/owners of growing operations in Mexico and some of the largest buyers of Mexican tomatoes in the U.S.  The wealthiest handful of FTE members also control networks of regional tomato repackers across the U.S. that, in turn, control access to retail markets.  They position themselves as victims in an attempt to game U.S. trade law to create a monopoly for themselves in the tomato market by ensuring a market for selling inferior tomatoes and controlling the flow of their own Mexico-sourced tomatoes at higher prices caused by duties.  If the FTE gets its way, a vast majority of U.S. importers would be harmed as FTE members expand their control of what tomatoes consumers can buy at significantly higher prices.”

FPAA reiterates, “What FTE members have discovered is they do not have to innovate and find new ways to meet consumer demands.  They can invest in Mexico themselves; construct repack operations to control access to the market, cry for protection for their inferior tomatoes grown in Florida and ask the U.S. government to give them the keys to control the entire North American tomato market by driving other U.S. importers out of business through the imposition of duties. The FPAA and its members look forward to continuing to work with the Department of Commerce on ensuring compliance to the 2019 Tomato Suspension Agreement.  FPAA members also look forward to continuing to work hard to meet consumer demands so that high-quality, affordable tomatoes are available in the U.S. 

FPAA notes, “Such a political action by the U.S. acting on behalf of a U.S. special interest group would almost certainly result in retaliatory actions by Mexico, the second largest importer of US agricultural products. U.S. growers of other commodities that rely on Mexico as a key export market would be hurt in the FTE effort to line the pockets of a small number of wealthy Florida businessmen.”

Tomatoes sold in the U.S. from Mexico are controlled by the U.S. Department of Commerce through the Tomato Suspension Agreement. FPAA adds that the suspension agreement “sets minimum pricing, puts in place requirements for sales between importers and buyers, requires exhaustive inspections for quality, and has stringent enforcement and compliance monitoring measures in place.  This includes regular quarterly audits, administrative reviews, on-site audits from the U.S. Department of Commerce, and enforcement measures in place in Mexico.  Contrary to FTE’s false claims, the Department of Commerce has consistently found Mexican tomatoes have complied fully with the Tomato Suspension Agreement.  Since the implementation of mandatory quality inspections that Florida growers demanded under the 2019 Tomato Suspension Agreement, 99.992 percent of all tomatoes that must be inspected from Mexico have met or exceeded all quality requirements.” 

In its strong retort to FTE’s recent move, FPAA continues: “The rest of the world (Mexico, Canada, U.S. states outside of Florida, Latin America, Europe, Asia) has evolved and learned to use green house, shade house, and similar protected agriculture technologies that offer advantages in quality, increased yields, and food safety protections.  Through each renegotiation of a Tomato Suspension Agreement, Florida continues to move the goal posts by adding new requirements for Mexican tomatoes to be imported.  However, making it harder or more costly for Mexican tomatoes to be imported will not change the fact that Florida is unwilling or unable to adapt how they grow tomatoes while the rest of the world has evolved to meet consumers’ changing tastes. Florida unreasonably asks for government protection from imported Mexican tomatoes to cover up their inability to adapt and grown tomatoes that consumers prefer.”  

This is a conclusion supported by Florida’s own researchers.  A University of Florida study states, “Most of the soils used to produce peppers and tomatoes in Florida are some sort of sand, ranging from coarse "ball bearing" sands to fine "sugar" sands. In other pepper and tomato producing regions, most notably in the Homestead area, what passes for soil is basically pulverized limestone from ancient coral reefs. In either case, Florida's soil is merely a media to hold plants that provides little in terms of nutrients beyond what the grower supplies.” 

Florida is a hostile place to grow tomatoes, and yet they continue to blame U.S. importers for those woes.

FPAA says its members ship high-quality, good tasting, innovative tomato varieties such as greenhouse and shade house grown, vine-ripened round and roma tomatoes, tomatoes on the vine, and cherry and grape tomatoes in an array of colors, all available in pack styles and presentations for a wide mix of uses. 

Consumer tastes have evolved, so U.S. companies work with world-class growers in the U.S., Mexico, Canada, and other countries to meet that demand.  

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