Concerns Over New Tomato Suspension Agreement with Mexico

Brian German Exports/Imports, Trade

Mexican officials have agreed to terms with the U.S. Department of Commerce in regard to a new tomato suspension agreement between the two countries.  The new agreement that was reached last week will end the 17.56 percent tariff that importers of Mexican tomatoes have been operating under for the past few months.  The new arrangement will return the industry to reference prices and will also implement more stringent food safety measures for produce coming into the U.S.  The increased oversight is creating some significant concern for some importers and retailers.

Tomato Suspension Agreement “It is outrageous that Commerce used false justifications to introduce what essentially acts as a quota or volume control method,” said Lance Jungmeyer, president of the Fresh Produce Association of the Americas (FPAA). “It is completely unnecessary to require USDA to conduct quality inspections on an item that has already demonstrated a historical pass rate of 99.76%.”

The new deal will require U.S. officials to inspect more than 90 percent of the tomatoes coming from Mexico, which are estimated to be valued at about $2 billion annually.  Inspections have only been conducted on less than ten percent in years prior.  FPAA, as well as some retailers such as Walmart, are concerned that the increased inspections will cost nearly $300 million for the industry to develop the infrastructure to operate under the new agreement.  Still, some U.S. officials have heralded the new tomato suspension agreement as a significant move in the right direction. 

“Today’s successful outcome validates the Administration’s strong and smart approach to negotiating trade deals,” Secretary of Commerce Wilbur Ross said in a press release.  “The Department’s action brought the Mexican growers to the negotiating table and led to a result that protects U.S. tomato producers from unfair trade. It also removes major uncertainties for the Mexican growers and their workers.”

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Brian German

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Ag News Director, AgNet West