U.S. Commerce Department sets preliminary 25 percent margin on Mexican tomatoes
Tomato imports to the United States from Mexico have caused more controversy this year than you would expect for a piece of produce.
Earlier in the year, the Commerce Department severed the quarter-century-old Tomato Suspension Agreement with Mexico in favor of Florida lawmakers looking to get more attention for their local tomato farmers.
But, now the Commerce Department has announced a preliminary dumping margin of nearly 26 percent on Mexican tomato imports following its own investigation into whether tomatoes from Mexico are being dumped. While preliminary, it could move up or down before Commerce announces its final decision on September 19. From there, the International Trade Commission will determine if there is any negative impact as a result from Mexico tomatoes coming into the U.S.
“There are several producers who are dealing with less contentious commodities. There is a continued demand for fresh product in the country and they may take the chances on higher prices,” economic consultant Luis Ramirez said. “The biggest impact will be on the consumer. High prices, fewer choices, and less quality.”
The concern on both sides of the border was that ending the agreement would increase prices and limit imports. After an 18-percent duty was imposed on imported Mexican tomatoes following the nixing of the agreement, volume actually rose a bit, by half a percent, to 120.7 million pounds in Nogales in May.
While things hover for the next six weeks or so, the Commerce Department and Mexican growers can still bring negotiations to the table for a new suspension agreement that would stop the investigation into dumping.
Florida-based tomato advocates at the Florida Tomato Exchange (FTE) have been pushing for harsher duties on Mexican imports to favor their own product. Lance Jungmeyer, president of the Fresh Produce Association of the Americas (FPAA), called their efforts an attempt “to regulate their way to profitability.”
“We strongly agree that U.S. farmers must be protected but the FTE actions go well beyond the intent of the law,” Jungmeyer wrote in a letter earlier this summer. “They are attempting to create a seasonal monopoly to force their products onto the American public to make up for their lack of foresight and innovation.”
The FPAA’s home base, Nogales, is a port of entry location for Arizona that usually sees around $600 million-worth of tomato imports come through its border during a full import season. The concerns raised by the FPAA, local economists, and lawmakers have been that not only will those numbers reduce but jobs will also be cut down.
“There’s a big push to see if [Congress] will get something done by September. The goal is to set the parameters for the upcoming season,” Ramirez said. “The increasing volumes and sales were premade commitments, now it’s in the downward path of the season. We’re already waiting to see what’s going to happen the next season.”
This story was originally published at Chamber Business News.