Mexican tomato growers offer changes to suspension agreement, and Florida growers open to negotiate

PRESS RELEASE — Associations representing most of the Mexican tomato industry on April 8, formally presented to the Commerce Department proposed changes to the 2013 Tomato Suspension Agreement that include unprecedented enforcement and anti-circumvention provisions and strategic price increases.

While the record of the 2013 Agreement reflects full compliance with the agreement, the Mexican growers offered these proposals in the spirit of goodwill and to ensure airtight enforcement. The proposal includes the following:
-Price increases ranging between 6 and 34 percent, including eliminating any differences between the summer and winter prices under the agreement, and establishing a higher price for specialty tomatoes grown organically.
-Requirements that loads of Mexican tomatoes with more than 35 percent condition defects will have to be driven back to Mexico at the grower’s expense.
-Provisions making exports of Mexican tomatoes under a different signatory number other than one’s own a violation of the agreement.
-No adjustments can be made under the reference price.
-Provisions to block unintended exports of fresh tomatoes from Mexico and better manage inventory levels in the United States.
-Provisions to strengthen the ability of the Department of Agriculture to enforce the Tomato Suspension Agreement under the PACA by giving the Commerce Department all necessary grower documents to prove PACA violations.
-New penalties for intentional violations of the agreement by Mexican growers or their selling agents.
-Commitments by Mexican growers to help facilitate efforts by an interagency task force to enforce the agreement, including through on-site and video verifications, and a willingness to use independent auditors to help in that effort.

“Our goal from the beginning of the renegotiation process has been to focus on enforcement even though there is no evidence of circumvention of the agreement,” said Oscar Woltman, president of AMPHAC, the largest Mexican growers association.

“We have developed proposals on both sides of the border focusing on enforcing the arrival condition of the first sale, which is what is covered by the antidumping law. We can’t, of course, agree to anything that goes beyond the reach of U.S. law,” added Rosario Beltran of Confederación de Asociaciones Agrícolas del Estado de Sinaloa, A.C.

Added Salvatore Garcia, President of Consejo Agrícola de Baja California, A.C.: “We have said all along we prefer an agreement over litigation, but only if it is fair.”

Florida Response:
Michael Schadler, executive vice president of The Florida Tomato Exchange, said in a prepared statement:
“The domestic industry remains open to negotiating a new suspension agreement to prevent unfairly traded Mexican tomatoes from continuing to injure American tomato producers.

We welcome the Mexican proposal because, for the first time, it contains some useful suggestions on how to prevent circumvention of the suspension agreement by Mexican producers.

We will be providing comments to the Commerce Department on the Mexican proposal along with ideas on how to improve the earlier Commerce Department proposal from October 2018. We are hopeful this will lead to negotiations between the Mexican growers and the Commerce Department for a new suspension agreement that will finally meet the statutory requirement to eliminate completely the injurious effects of unfairly traded tomatoes.”