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U.S. to withdraw from tomato suspension agreement

Earlier this week, the U.S. Department of Commerce notified the Mexican signatories to the 2013 Suspension Agreement on Fresh Tomatoes from Mexico that the department intends to withdraw from the agreement, which states that “signatories or the department may withdraw from this agreement upon 90 days written notice to the other party.” With the written notification, commerce intends to withdraw from the agreement on May 7.

“We have heard the concerns of the American tomato producing industry and are taking action today to ensure they are protected from unfair trading practices,” said Secretary of Commerce Wilbur Ross. “The Trump Administration will continue to use every tool in our toolbox to ensure trade is free, fair, and reciprocal.”

Upon completion of the withdrawal, the Department of Commerce will continue with its investigation and notify the International Trade Commission of its final determination. If the department continues to find sales made at less than fair value in its final determination, the ITC will then complete its own investigation and make a final determination with respect to injury. If both commerce and the ITC issue affirmative final determinations, an antidumping duty order will be issued.

The department opened negotiations with the Mexican signatories in January 2018. Despite committed efforts from all sides, significant outstanding issues remained with respect to crafting a revised agreement that would be acceptable to the Mexican signatories and address the concerns of the U.S. domestic industry to the extent possible under U.S. trade law. In November 2018, the Florida Tomato Exchange requested commerce end the agreement and resume the antidumping investigation of fresh tomatoes from Mexico. Commerce said it finds at this stage that "it is appropriate to notify the Mexican signatories of our intent to withdraw, terminate the agreement, and resume the investigation."

The Fresh Produce Association of the Americas said it is disappointed that the Department of Commerce intends to withdraw from the agreement with Mexico, but pointed out that the agreement remains in effect during the 90-day window, and buyers and sellers must continue to follow the rules.

“The Tomato Suspension Agreement has brought stability to the U.S. tomato market for over two decades, and it has been updated as the market has evolved,” said FPAA President Lance Jungmeyer. “These updates have resulted in a wide selection of fresh tomatoes for U.S. consumers, while complying with U.S. trade laws, and adding enforcement mechanisms as the agreement itself has evolved. Despite Florida’s rhetoric, the record has shown that both Mexican growers and U.S. distributors have complied with the rules of the agreement.”

FPAA reiterated the importance for commerce to continue negotiating with Mexican growers toward a new agreement.

“There is still time to reach a new agreement that serves the interests of U.S. growers of tomatoes, as well as importers of Mexican tomatoes,” Jungmeyer said.

Jungmeyer reiterated that it would be regrettable if this development caused an increase in tomato pricing or a reduction in varieties on supermarket shelves. “American consumers deserve to have free choice and selection of their preferred tomatoes, including vine-ripened tomatoes,” Jungmeyer said.

Between now and May 7, buyers and sellers must continue to abide by the terms of the 2013 Tomato Suspension Agreement with Mexico. If an agreement is not reached by May 7, tomato imports from Mexico will have duties applied.