USITC finding goes against Mexican tomatoes

by Tad Thompson | November 25, 2019

On Nov. 22, the United States International Trade Commission voted 4-0 that dumped tomatoes from Mexico threaten to injure the American tomato industry. As a result, the recently finalized agreement — negotiated by the Department of Commerce — suspending the antidumping duty investigation of fresh tomatoes from Mexico will remain in place.

Commercial fresh tomatoes within this ruling “include common round (including beefsteak), cherry, grape, plum/Roma, and pear types. Tomatoes can be grown in an open field or in a protected environment--including greenhouses, shade houses, and tunnels.”

Secretary of Commerce Wilbur Ross said Nov. 22 in a DOC release: “This action cements the strong suspension agreement that Commerce recently negotiated that protects the U.S. tomato industry from the damaging effects of unfair trade and provides certainty for the market.”

Del-Campo-shade-house-tomato Nogales-based Fresh Produce Association of the Americas responded to the decision indicating its members are “disappointed that the U.S. International Trade Commission failed to recognize that the growth of Mexican tomato imports is due to U.S. consumer preferences and U.S. companies seeking out the best varieties and growing regions to meet these demands.

“Companies across North America have been importing tomatoes from Mexico for over a century. U.S. importers have worked with their North American customers to create a category of tomatoes highlighted by superior quality, flavor and consistency of supply.

 Today’s ruling will not change this,” said FPAA President Lance Jungmeyer in a Nov. 22 press release.

“Consumers prefer vine-ripened tomatoes, and this is why domestic gassed-green tomatoes continue to lose market share. We are disappointed that the USITC failed to recognize this simple reality,” stated Jungmeyer.

The FPAA continued: “As a result of the USITC determination, the Tomato Suspension Agreement remains in effect. The FPAA continues to work closely with its members to implement and fully comply with the new agreement.”

In its Nov. 22 comments on the ITC ruling, the Florida Tomato Exchange indicated: “This determination comes on the heels of an announcement last month by the U.S. Department of Commerce, which found that Mexican tomatoes had been dumped in the U.S. market at an average margin of 21 percent less than fair value. These rulings validate the U.S. industry’s long-held claims about dumped Mexican tomatoes. The ITC will formally issue its determination on December 9, which will mark the end of the antidumping investigation that began in 1996.”

The Florida group noted: “An affirmative determination in an antidumping investigation typically leads to the imposition of duties on the subject imports, but since the investigation was completed after the signing of a new suspension agreement, the antidumping duties will be suspended for as long as the agreement remains in place. If either side withdraws from the agreement, the duties will be immediately imposed. The Florida Tomato Exchange hopes that this new reality will instill discipline among exporters and importers of Mexican tomatoes so that they will not attempt to circumvent the rules of the suspension agreement.

“The U.S. industry is looking forward to finally turning the page after two difficult years of negotiations and investigations.

Michael Schadler, executive vice president of the FTE said: “The new agreement provides a level of certainty that has that has been lacking over the last couple of years on both sides of the border, and we hope all parties can now focus on complying with the terms of the new agreement. We will remain very engaged with the Commerce Department to ensure that the inspection and compliance provisions of the new agreement are being followed and enforced properly.”

Florida tomatoes added: “The FTE is thankful to its fellow tomato growers around the country that worked together to make sure the Commerce Department recognized that this was a national issue. This national recognition was helped by the bipartisan support of members of Congress from 11 different states who understood the importance of sustaining American agriculture that is threatened by unfairly priced imports.”

The DOC recounted that, “on September 19, 2019, Commerce and Mexican tomato growers finalized the 2019 Suspension Agreement, which contains robust enforcement provisions completely eliminating the injurious effects of unfairly priced Mexican tomatoes, preventing price suppression and undercutting, as well as eliminating substantially all dumping. This agreement also closes loopholes from past deals that permitted sales below the reference prices, while including an inspection mechanism to prevent the importation of low-quality, poor-condition tomatoes from Mexico and allowing Commerce to audit up to 80 Mexican tomato producers and U.S. sellers per quarter, or more with good cause.”

Commerce continued: “On October 11 and 15, 2019, domestic tomato producers exercised their option under the AD law to request that Commerce and the ITC continue their previously suspended investigations on fresh tomatoes from Mexico. Accordingly, the Department completed its (anti-dumping) investigation, finding that Mexican tomatoes are dumped in the United States, while the ITC’s affirmative vote addresses injury to the domestic industry. Together, these determinations allow the 2019 Suspension Agreement to remain in force, in lieu of anti-dumping duties.”

Parties carry out their obligations in accordance with the agreement’s terms.

ITC Commissioners Rhonda Schmidtlein, Jason Kearns, Randolph Stayin, and Amy Karpel voted Nov. 22 in the affirmative.  Chairman David Johanson did not participate in this vote. 

The International Trade Commission’s public report Fresh Tomatoes from Mexico (Inv. No. 731-TA-747 (Final), USITC Publication 5003, December 2019) will contain the views of the Commission and information developed during the investigation. The report will be available by December 30, 2019; when available, it may be accessed on the USITC website at: http://pubapps.usitc.gov/applications/publogs/qry_publication_loglist.asp.

 

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