On May 7, the U.S. Department of Commerce announced the termination of the U.S.-Mexico tomato suspension agreement. This follows its initial notice of intent to withdraw from the agreement back on February 6, 2019.
In response to a petition requesting an antidumping investigation of Mexican tomato imports, an agreement was reached in 1996 between the two countries that set minimum price floors on imports during certain months of the year. As such, the agreement and its subsequent updated versions have ‘suspended’, or halted, the investigation. Since November 2018 there has been a push to terminate - primarily driven by Florida growers, although frustration with the agreement is echoed by other domestic producers in California, Michigan, and New Jersey.
With the agreement’s termination, an investigation by the Department of Commerce, as well as one by the International Trade Commission, will resume. It is tentatively expected that final determinations should be reached by November 2019. Negotiations between Mexico, the United States, and their respective growers will also continue to potentially reach a new agreement, with domestic growers seeking stronger enforcement mechanisms and tightening of alleged loopholes.
Importers of fresh Mexican tomatoes should expect to see a preliminary 17.5 percent antidumping duty tacked onto all imports in the coming days. The importer of record must also maintain a continuous customs bond, which guarantees to Customs and Border Protection (CBP) that the importer will pay any additional duties. Any deposits collected by CBP will be refunded if a revised agreement is reached, or if the investigations find no unfair pricing or injury. It should also be kept in mind that, if or when a new agreement is reached, an additional 30 days will be needed to allow for public comment.
More information on CBP’s processes can be found here.
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