(UPDATED COVERAGE, Feb. 4) The U.S. and Mexico have agreed to a plan that substantially raises prices for imported Mexican fresh tomatoes, but the association representing U.S. importers said the plan is unreasonable.
The Commerce Department announced the plan on Feb. 2. It sets different floor prices during summer and winter, and also specifies prices for open field/adapted environment and controlled environment production. The plan is not final; comments will be accepted on it until Feb. 11 at the Department of Commerce Import Administration website.
The Commerce Department will consider the comments and release a final version by March 4.
Despite widespread media coverage of a U.S.-Mexico trade war averted, however, the Fresh Produce Association of the Americas, which represents companies that import Mexican tomatoes, is critical of the details in the plan. The FPAA was not involved in the negotiations and president Lance Jungmeyer said it’s not a reasonable solution.
Jungmeyer said many Nogales, Ariz., distributors were initially optimistic when learning Feb. 2 of the agreement maintaining suspension agreement. When more details were released, however, growing numbers of U.S. importers and distributors became worried about the effect of the size of the price increases on buyer and consumer demand.
“A price increase this high gives the U.S. industry more room to maneuver, it gives them plenty of room to sell at 10 cents (per pound) below that floor price all day and essentially keep Mexico out of the market,” he said Feb. 4.
The Commerce Department news release on the agreement paints a different picture.
“I am pleased that we were able to come to an agreement on fresh tomato imports from Mexico that restores stability and confidence to the U.S. tomato market and meets the requirements of U.S. law,” Francisco Sánchez, under secretary of commerce for international trade, said in a news release.
“The draft agreement raises reference prices substantially, in some cases more than double the current reference price for certain products, and accounts for changes that have occurred in the tomato market since the signing of the original agreement," he said in the release.
U.S. growers were unhappy with current floor prices for Mexican tomatoes and in 2012 requested the end of a suspension agreement that set those prices since 1996, stopping an anti-dumping investigation.