The Produce Industry Comments on U.S. Department of Commerce's Intent to Withdraw from Tomato Suspension Agreement

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Fri. February 8th, 2019 - by Jessica Donnel

UNITED STATES - With last week’s news that the U.S. Department of Commerce intends to withdraw from the 2013 Tomato Suspension Agreement with Mexico came plenty of buzz from across the produce industry. Though buyers and sellers must continue to abide by the terms of the 2013 Tomato Suspension Agreement with Mexico until May 7 (when the withdrawal from the pact officially goes into effect), many members of the fresh produce industry have already expressed concern for, or cheered on, the U.S.’s decision. Below are just a few perspectives from tomato stakeholders.

Lance Jungmeyer, President, Fresh Produce Association of the Americas“The Tomato Suspension Agreement has brought stability to the U.S. tomato market for over two decades, and it has been updated as the market has evolved,” said Lance Jungmeyer, President of the Fresh Produce Association of the Americas. “These updates have resulted in a wide selection of fresh tomatoes for U.S. consumers, while complying with U.S. trade laws, and adding enforcement mechanisms as the agreement itself has evolved. Despite Florida’s rhetoric, the record has shown that both Mexican growers and U.S. distributors have complied with the rules of the agreement.”

Jungmeyer noted that he believes there is still time to reach a new agreement that serves both U.S. growers of tomatoes, as well as importers of Mexican tomatoes. He said what the Florida tomato industry is trying to do is intended to discourage U.S. businesses from selling Mexican tomatoes and outside the scope of law. He also reiterated that it would be regrettable if the change caused an increase in tomato pricing or a reduction in varieties on supermarket shelves.

On the other side of the coin is Michael Schadler, Executive Vice President, Florida Tomato Exchange (FTE). He believes that the current suspension agreement has not been working as intended.

Michael Schadler, Executive Vice President, Florida Tomato Exchange“The FTE appreciates the efforts of the Commerce Department to ensure that unfairly trade Mexican tomatoes do not continue to injure the American tomato industry,” Schadler said. “The Commerce Department recognizes that the suspension agreement is not working as intended under the U.S. antidumping law, and the American tomato industry appreciates Secretary Ross' decision to terminate the suspension agreement.”

Schadler said that the FTE has been working with the Commerce Department in its effort to negotiate a new and effective suspension agreement, though he also believes the Mexican tomato industry will need to join in on negotiations. If Mexican tomato interests do not join in the conversation, the American industry will have no choice but to pursue antidumping duties imposed on imports of tomatoes from Mexico, he warns.

The U.S. Department of Commerce intends to withdraw from the 2013 Tomato Suspension Agreement with Mexico

Matt Mandel, VP of Operations for SunFed, also commented on the news.

Matt Mandel, VP of Operations, SunFed®“The news coming out of the Commerce Department that the suspension agreement will be terminated is sad, frankly,” Mandel said. “The choice to withdraw is a politically-motivated choice as negotiations have been continuing on and should be allowed to come to a proper conclusion. The real losers here are American consumers who will bear the burden of higher prices.”

Dante Galeazzi, President and CEO of the Texas International Produce Association (TIPA), echoed many of the same sentiments as Jungmeyer and Mandel and called on the Department of Commerce to justify its actions.

Dante Galezzi, President and CEO of the Texas International Produce Association"To say the least, TIPA is disappointed about the Department of Commerce’s decision to withdrawal from the 2013 Tomato Suspension Agreement,” Galeazzi commented. “It’s an unexpected move, especially considering DOC did not point to any violations or other evidence of companies failing to adhere to the terms of the agreement. I think our members would welcome DOC explaining what they found to cite as ‘unfair trading practices.’

He continued: “We would also like to see what the International Trade Commission (ITC) has to say regarding their findings. Hopefully, with the results from ITC as well as DOC, all parties can approach this process with an accurate picture as to the effectiveness of the agreement. It seems hard to fathom that, in the last 6 years, conditions have changed so much so that a renegotiation of the agreement would be necessary.”

AndNowUKnow expects more news to come out of the deal as we get closer to the May 7 deadline. Stay tuned for the latest.