Tomato Suspension Agreement Battle May Not Be Over Yet

The termination of the Tomato Suspension Agreement may be stopped in its tracks after associations representing the Mexican tomato industry have proposed changes to the agreement. The agreement was set to be terminated on May 7. The associations recently presented their proposal to the U.S. Department of Commerce.

According to a report from Abasto (https://abasto.com/en/mexican-growers-tomato-imports/), the changes proposed by the Mexican tomato industry include 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 to 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 Perishable Agricultural Commodities Act (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.

Following the presentation of this proposal, Michael Schadler, executive vice president of the Florida Tomato Exchange, released the following reaction:

• 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.