The Tomato Suspension Agreement remains in place, and President of Fresh Evolution Martin Ley, who has played an integral role in Mexican tomato trade matters for years, advises the tomato industry to continue routine operations.
Ley said that there has been a recent undercurrent of information coming from Florida growers that could be confusing to those not intimately involved with the complex legal matters involving the sale of Mexican tomatoes into the United States.
Commercial Mexican tomato production, such as this in Culiacan, generally uses sophisticated shade houses with high food-safety standards, strong tomato varieties and the latest growing and packing techniques.
According to a Nov. 14 press release from the Mexican growers, the Florida Tomato Exchange asked the U.S. Department of Commerce to withdraw from the agreement, eliminate the reference prices and resume the related, initial 1996 anti-dumping investigation. The release, which was signed by Ley and Mario Robles, the director CIDH-CAADES in Culiacan, noted that the Florida Tomato Exchange “is not a signatory to the agreement and represents only a small portion of the U.S. industry. Accordingly, FTE cannot compel such an action.”
The release continued: “The Mexican signatories are disappointed that FTE would make this request. FTE did not raise any issues for the first five years of the agreement and its recent claims are all directly contradicted by U.S. Department of Agriculture data and the U.S. Department of Commerce’s own finding to date.
“FTE’s request is quite surprising, given the large volume of Mexican tomatoes FTE members like Lipman, Procacci, DiMare and Pacific Tomato Growers, purchase and distribute in the United States,” said Robles of the Sinaloa association. “We can’t figure it out.”
Among the questions being asked by federal regulators is the involvement of these major Florida growers in Mexican production. The same growers are key members of the Florida Tomato Exchange, which is based in Orlando. But, Ley asks, if the members are involved in Mexican production, do they have a legitimate complaint about Mexican competition?
The Mexican signatories have been working with the Commerce Department for over five years to rigorously enforce the agreement. The Mexicans “have been working since June on a number of enhanced monitoring and enforcement provisions designed to further strengthen the framework that has been in place since 2013. The Mexican signatories intend to continue this effort.”
Ley said Nov. 21 that “the Florida industry has put all kinds of information in public eyes. We want to make sure that we do not let the industry get confused. It’s extremely important that the International Trade Commission has a clear and true perspective on the industry.”
What may be confusing for those growing, importing, packing, repacking or buying tomatoes is a move by the Florida Tomato Exchange to abolish the Tomato Suspension Agreement, which has been in place since 2013.
The Tomato Suspension Agreement places floor prices on Mexican tomatoes entering the U.S.
This is one of every five years that a sunset review is required for an analysis of Mexican tomato exports, which leads to a value appraisal of the Tomato Suspension Agreement.
Background information from the Mexican group indicates “The U.S. Commerce Department and the U.S. International Trade Commission initiated concurrent sunset reviews of the agreement in February 2018. Both reviews are currently ongoing. In order for the agreement to continue, these agencies must make final determinations that dumping (determined by the DOC) and injury (coming from ITC) will likely recur or continue if the agreement is terminated. If so, the agreement will remain in place as it is with no changes. If not, the agreement is terminated and there is a free market.”
Ley emphasized that the sunset review is not an opening to renegotiate the Suspension Agreement, but is a check-up on the matter, akin to going to the doctor for a five-year check-up.
According to the Mexican tomato industry legal counsel, the DOC “is also undertaking an administrative review of the suspension agreement at the request of both the Mexican and Florida producers. Commerce will issue its preliminary determination on or before April 1, 2019.”
The Mexican interests also indicate that the Department of Commerce and the Mexican signatories are currently discussing possible changes to the agreement, but the details are not public and no determination by the parties has been made. Again, it’s stated that the U.S. industry is not a party to the agreement.
Litigation challenging the agreement at the U.S. Court of International Trade has been stayed to allow for discussions to proceed. An update is due to the court Dec. 4.
Coincident with these matters is, for the first time, an International Trade Commission financial review of the Florida tomato growers and marketers. Ley noted that if Florida growers managed to terminate the Suspension Agreement, they would no longer need to open their books to a review by the U.S. government.
“They shouldn’t be afraid of submitting information. We do it every quarter as part of the Suspension Agreement,” Ley noted.
