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U.S. tomato growers seek new agreement

The Florida Tomato Exchange in Maitland, FL, has filed documents with the U.S. Department of Commerce and the U.S. International Trade Commission to withdraw an antidumping duty petition that had been filed in 1996, thereby terminating the suspended investigations and the current suspension agreement.

In 1996 the exchange, along with other tomato growers across the United States, filed the antidumping petition requesting relief from unfairly traded imports of fresh tomatoes from Mexico. The U.S. government, after examining the facts, determined that there was reason to believe that the subject tomatoes were being sold in the United States at less than fair value at margins as high as 188.45 percent.

“Their findingsReggie-pic2Reggie Brown, executive vice president of the Florida Tomato Exchange came as no surprise to the petitioning growers whose sales and operations had been devastated by unfairly traded tomatoes from Mexico,” Reggie Brown, executive vice president of the Florida Tomato Exchange, said in the statement. “The U.S. government suspended action on the investigation and entered into a suspension agreement with the Mexican producers and exporters. That suspension agreement was rejected six years later by Mexican growers and a new suspension agreement was soon implemented. Five years later, Mexican growers once again rejected the agreement that was in place and, again, shortly thereafter a third — the current agreement — was put in place.”

Lance Jungmeyer, president of the Fresh Produce Association of the Americas, said that the suspension agreement has provided some order to the marketplace, which was the original intent. “We are pleased that since 1996, when the first tomato suspension agreement took effect, tomato growers from Mexico have been diligent in complying with the agreement,” Mr. Jungmeyer said in a statement issued June 27 by the Fresh Produce Association of the Americas.

While the FPAA is not itself a signatory to the suspension agreement, some tomatoes marketed by FPAA member companies do fall under the agreement, and the FPAA engages in industry outreach on the subject.

“Since the inception of the first agreement, jungmeyerLance Jungmeyer, president of the Fresh Produce Association of the Americaswe have been collaborating with the U.S. DOC in education and enforcement efforts. We are confident that Mexico has abided by the letter and intent of the agreement,” Mr. Jungmeyer added.

However, Mr. Brown said that during the entire period since 1996, U.S. growers have been the victims of gamesmanship and evasive actions by Mexican growers. Imports today, he said, are roughly three times the value that they were when the case was first brought with a staggering level of imports of roughly $1.8 billion last year.

“There has been virtually no change in the underlying reference price in the three suspension agreements that are supposed to reflect Mexican costs of production,” said Mr. Brown.

Jimmy Grainger, president of the Florida Tomato Exchange added to the statement saying, “Sixteen years after the case was first filed, clearly, the cost of production has risen, but that is not the basis for the agreement that’s in place. It’s time to end the charade and restore fair prices that reflect market reality.”

The Florida Tomato Exchange, along with growers across the United States reflecting a majority of domestic production, have filed with the government a letter withdrawing their 1996 petition so as to terminate the process and the existing suspension agreement. This action is required to try to restore fair competition to the market and eliminate the predatory actions of producers in Mexico, according to the exchange.

Mr. Brown said that domestic field and greenhouse growers are facing enormous economic pressures that are injuring their operations, their workers and the communities in which they operate.

“Revenue for domestic producers was down by probably more than $100 million for the first quarter of this year alone,” he said. “The suspension agreement isn’t working, and needs to be terminated. The facts have changed and the current agreement is unfair to U.S. growers and their workers. It’s time to abandon the agreement, which limits our ability to ensure fair trade in tomatoes, and give us a chance to compete. The existing agreement ties our hands behind our backs while a flood of unfairly priced tomatoes swamps our market. The Obama administration should do what every previous administration has done in similar circumstances by quickly terminating the suspended investigation and suspension agreement.”

Despite news that the suspension agreement may be over, FPAA cautioned that the Department of Commerce must officially drop the anti-dumping investigation for the case to be closed, and until then growers were required to continue operating under the suspension agreement. “Marketers of the product grown by signatory growers should continue to operate under the terms of the suspension agreement until officially notified otherwise,” Mr. Jungmeyer said in the FPPA statement.

A termination of the investigation and agreement would, Mr. Brown asserted, allow the facts to drive the result should the industry file a new petition and for fair trade to work.

“It’s time to be honest and say that the current agreement simply isn’t working,” he said. “The Obama administration should act quickly so that growers and their workers in Florida, Texas, California, Virginia and many other states have the opportunity to succeed.”