FROM THE PRODUCE NEWS by Joan Murphy | October 01, 2012

A final decision by the U.S. Department of Commerce to terminate the suspension agreement for Mexican tomatoes will reopen a dispute between the trading partners, result in a loss of jobs on both sides of the border and increase prices for consumers, warned Ricardo Alday, spokesman for the Mexican Embassy.

The Florida Tomato Exchange and other U.S. petitioners filed documents June 22 asking to terminate the 16-year-old tomato suspension agreement with Mexico. U.S. producers had cited the increase in greenhouse tomato production in the United States and Mexico, drops in the number of acres of tomatoes farmed in the United States, inflation in Mexico, and doubling of volume and tripling in value of Mexican tomato imports as market changes since the 1996 agreement was struck.

Less than a month after Commerce notified the public it was reviewing the petitioners’ request, it signaled its preliminary decision Sept. 27 to terminate the suspension agreement. The agreement covers all Mexican-grown fresh or chilled tomatoes, including common round, cherry, grape, plum, greenhouse and pear tomatoes.

U.S. tomato producers representing over 90 percent of U.S. production expressed a lack of interest in continuing the suspended investigation, the DOC found. U.S. trade law requires that “substantially all” domestic producers must oppose the order or suspension agreement before DOC and terminate it.

DOC agreed with U.S. tomato producers that U.S. Department of Agriculture data can be relied upon to calculate the large percentage of fresh tomato companies in support of abandoning the agreement, Lynn Fischer Fox, deputy assistant secretary for policy and negotiations at DOC’s International Trade Administration, said in a 16-page memo in support of terminating the agreement.

“We are extremely disappointed,” said Mr. Alday, who suggested the decision was dictated by politics, not sound policy. “We’re hopeful Commerce can take a very measured approach. We feel the suspension agreement should remain in place. If DOC stands firm, it will have major trade implications at a delicate time for both countries, he said.

Mexican producers had urged DOC in earlier comments not to rush its decision and to use the entire 270-day timeline allowed for conducting a changed circumstances review.

But DOC’s decision came so fast it appears likely motivated by the upcoming election, said Lance Jungmeyer, president of the Nogales, AZ-based Fresh Produce Association of the Americas. Mexican growers were traveling to Washington, DC, for a Sept. 28 meeting when they received notice of DOC’s decision.

“The Mexican grower groups had tried in vain for four months to schedule a face-to-face opportunity to renegotiate this agreement,” Mr. Jungmeyer said. “The fact that Commerce chose to terminate the agreement the day before this meeting only underscores the political pressure that Commerce was facing from the industry in Florida, a key swing state in the upcoming election.”

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