The Department of Commerce announced Wednesday it has reached a tentative agreement with Mexican tomato producers to stop cheap and low-quality produce from reaching the U.S., heading off a possible 25 percent tariff.
“After intensive discussions with all parties, we initialed a new draft suspension agreement with the Mexican growers late last night. This draft agreement meets the needs of both sides and avoids the need for antidumping duties,” Commerce Secretary Wilbur Ross said in a statement.
The U.S. imports about $2 billion of Mexican tomatoes each year.
{mosads}The draft suspension agreement includes enforcement provisions setting prices for different types of tomatoes, closes loopholes in past deals that permitted sales below reference prices and provides an inspection mechanism to prevent the importation of low-quality tomatoes.
The draft agreement stems from a request last year from the Florida Tomato Exchange asking the Commerce Department to terminate a 2013 suspension agreement on tomatoes from Mexico over accusations of price suppression.
The Commerce Department will provide a 30-day notice period after the initialing of the draft agreement and will sign a final deal by Sept. 19 to terminate its investigation, which otherwise could have led to the 25 percent tariffs.
The agency argued that the agreement will benefit tomato producers across the country, including those in Florida, Texas and Arizona, and Mexican Economy Minister Graciela Marquez tweeted Wednesday that the deal was “good news” and will “keep the market open for our tomato exports to the United States.”
The Border Trade Alliance (BTA) also welcomed the decision, saying new tariffs would have harmed commerce, though the organization expressed concerns that new inspections would slow the entry of Mexican tomatoes into the country.
“The Border Trade Alliance applauds the Commerce Department and tomato growers in Mexico for their diligent work over the last several months to preserve the duty-free construct that has defined U.S-Mexico trade for decades,” BTA President Britton Clarke said in a statement.
“While we are relieved that new duties and higher prices will not continue to be passed on to U.S. importers and consumers, we are wary of any new mandated inspection regime that could dramatically slow processing times of tomato imports at U.S. ports of entry and put freshness and quality at risk. We will examine any new inspection mandate closely.”
Mexico earlier this month had rejected a proposal to subject all tomato exports from Mexico to border inspections as “totally unacceptable,” according to Reuters.