Mexican growers urge new tomato pact as Florida group digs in

Wed Sep 19, 2012 7:37am IST

Related Topics

* Florida growers, lawmakers urge quick action to end tomato pact

* Mexican growers offer to negotiate changes to agreement

* Arizona lawmakers back Mexican industry on pact

By Doug Palmer

WASHINGTON, Sept 18 (Reuters) - Mexican tomato growers are urging the U.S. Commerce Department to renegotiate a 16-year-old tomato trade agreement with the United States, rather than give into election-year pressure from Florida producers and lawmakers to tear up the pact.

"Commerce has received a request by the Mexican signatories for consultations regarding the suspension agreement. We have agreed to hold consultations and expect to do so soon," a Commerce official told Reuters on Tuesday.

Florida tomato growers complain the agreement is outdated and fails to protect them against Mexican tomatoes sold in the United States below the cost of production.

Tearing up the agreement would allow Florida producers to file a new anti-dumping complaint, alarming the Mexican side that prefers the stability provided by the pact.

With Florida growers pressing for a Commerce Department decision before the Nov. 6 presidential election, Mexican growers offered a proposal on Monday to renegotiate the pact, representatives for the Mexican industry said.

"We've always said to them and the world that we're more than open to explore and address any issues that they may see," said Martin Ley, an executive board member of the Fresh Produce Association of the Americas.

Reggie Brown, executive vice president of the Florida Tomato Exchange, said his group did not want a new agreement.

"We're still dealing with Commerce Department and the Obama administration pandering to Mexicans. This is crazy. When are we going to worry about American farmers?" he said.

Florida is the second-largest U.S. producer of tomatoes behind California. U.S. production of both fresh and processing tomatoes totals about $2 billion annually.

Mexico accounts for about 71 percent of the U.S. import market for greenhouse tomatoes. Mexico and Florida historically compete for the U.S. winter and early spring market.

85-PERCENT THRESHOLD

The pact is called a "suspension agreement" because the Commerce Department suspended anti-dumping proceedings against Mexico in 1996 and negotiated a deal that sets a minimum price at which Mexican tomatoes can be sold in the United States.

Mexican growers have offered to renegotiate the reference price for Mexican tomatoes, now at 21 cents a pound. They also have offered to beef up border enforcement to stop violations and to bring more Mexican growers into the pact.

An attorney for the Mexican growers, speaking on condition of anonymity, said they sought the 1996 suspension agreement to stop a two-decade stream of anti-dumping cases brought by U.S. producers that cost millions of dollars to fight.

The Commerce Department does not have authority to tear up the agreement without the support of 85 percent of the U.S. industry, and they don't have that, the attorney said.

Florida growers and their allies in other states claim to represent more than 90 percent of the industry, but that is based on U.S. Agriculture Department figures that leave out large swaths of smaller tomato operations, he said.

"We think that they represent far less than half of the industry," the attorney said.

Brown scoffed at that calculation, saying USDA production figures are what matter and the Florida Tomato Exchange has affidavits from growers representing 90 percent of that.

Ley accused the Florida producers of failing to keep pace with changes in technology that have produced a tastier Mexican tomato and propelled sales in the United States.

"They just want to take advantage of politics to force this into the election," Ley said, noting the Florida growers' last case was also in a presidential election year, in 1996.

Both sides have enlisted support from members of Congress to make their case to the Commerce Department.

In three separate letters, Senator Bill Nelson, Representative Debbie Wasserman Schultz and 15 other members of Florida's congressional delegation urged senior Commerce Department officials to quickly terminate the pact.

A number of Arizona lawmakers, including Democratic Representatives Ed Pastor and Raul Grijalva, have urged the Commerce Department to keep the agreement in place.

Killing it "would immediately and negatively impact the $3 billion produce industry in Nogales, Arizona, which provides more than 12,000 jobs in the region alone," Pastor said.

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