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August 21, 2019

U.S. and Mexico Reach New Tomato Suspension Agreement

On Wednesday August 21, the U.S. Department of Commerce (DOC) announced that it had reached a new suspension agreement with the Mexican tomato industry.

Last November, the Florida Tomato Exchange petitioned DOC to terminate the 2013 Suspension Agreement on Fresh Tomatoes, which imposes specific pricing and other conditions on Mexican imports, in exchange for halting an antidumping investigation by U.S. authorities. Specifically, the petition alleged that enforcement of the agreement had been weak, with loopholes and other acts of non-compliance essentially allowing the domestic industry to continue being unfairly undercut by increasing imports. In May, DOC officially terminated the agreement, resuming its antidumping investigation and imposing preliminary duties (roughly 17 percent) and cash deposit requirements on imports. Since this time, DOC and the Mexican tomato industry have been in negotiations to reach a new agreement.

As more details continue to be released and reviewed, these are a few key provisions to highlight:

  • It sets new higher reference floor prices for various tomato varieties, including organic
  • It establishes a new enhanced inspection mechanism at the border to ensure quality
  • It allows DOC to audit up to 80 Mexican tomato producers per quarter, or more with good cause
  • Like previous versions, it will be up for review in five years

A 30-day public comment period will be available on the draft agreement. If finalized and signed by September 19, the antidumping investigation will once again be suspended with no final determination being made. Additionally, exporters and importers will be entitled to recover cash deposits paid since May.

Please contact Tracey Chow at [email protected] or 202-296-0191 for more information.