With Duties Looming, Nogales Importers Hope For New Tomato Deal
Since 1996, several versions of the Suspension Agreement on Mexican Tomatoes have set floor prices and other ground rules for the product’s importing.
But in March the U.S. Department of Commerce said it intended to withdraw, and restart an investigation into alleged dumping of Mexican tomatoes. If no new deal is inked by May 7, a roughly 17-percent duty will be imposed on those imports.
“We are preparing for duties. That’s where we are,” said Lance Jungmeyer, president of the Nogales-based Fresh Produce Association of the Americas. “We’re making sure our companies are prepared to pay duties if we get to that stage. We are very hopeful that we will see a new agreement.”
Those duties could mean less demand for not just tomatoes, but other major produce imports in the city. The import industry is the largest private employer in Nogales, and tomatoes are one of the most important products. Any duties would likely eventually be passed on to consumers, Jungmeyer says.
There are some signs a deal could come together. Mexican tomato growers submitted a proposal to the Commerce Department Monday, which includes an increased price floor for imports.
“It takes care of price, it takes care of any potential circumvention, it increases enforcement, and it basically is all within the law,” said Robert LaRussa, an attorney with the firm Shearman & Sterling who is representing the growers. “And we think the commerce department should accept this. It’s more than what anybody could have asked for, and it’s more than quite frankly what a lot of people in our industry want to do.
In a recent release, the Florida Tomato Exchange said they are open to negotiating a new settlement and that they “welcome the Mexican proposal because it contains some useful suggestions.”
An FTE representative did not respond to an interview request by deadline.
Florida growers, who asked the Commerce Department to leave the agreement last year, have long alleged that Mexican tomato growers have circumvented price floors, and generally decimated domestic tomato production. The FPAA and Mexican growers strongly contest those claims.