May 7, 2019 / 4:10 AM / 16 days ago

U.S. to impose tariffs on Mexican tomatoes as new pact remains elusive

MEXICO CITY (Reuters) - The United States will impose a 17.5 percent tariff on Mexican tomato imports starting on Tuesday, as the two countries were unable to renew a 2013 agreement that suspended a U.S. anti-dumping investigation, a Mexican official said on Monday.

FILE PHOTO: Tomatoes are displayed at a vegetable stall in La Merced market, downtown Mexico City January 31, 2013. REUTERS/Tomas Bravo

The U.S. Commerce Department said in early February that the United States would resume an anti-dumping investigation into Mexican tomatoes, withdrawing from a so-called suspension agreement that halted the anti-dumping case as long as Mexican producers sold their tomatoes above a pre-determined price. U.S. growers and lawmakers say that deal has failed.

At the time, Commerce said it was giving the required 90-day notice before terminating the six-year-old agreement.

“As of tomorrow a tariff of 17.5 percent will be applied on the value of the product ... Mexican exporters will be affected, it’s going to affect their financial flows but that is going to be directly transferred to U.S. consumers,” said Mexican Deputy Economy Minister Luz Maria de la Mora.

She added that the U.S. measures will remain in place until a new suspension agreement is reached.

“We’re very disappointed but the good news is that negotiations continue, looking for a solution. And we hope that in the coming weeks we can in fact reach an agreement,” said de la Mora.

Mexico exports around $2 billion worth of tomatoes to the United States annually, according to de la Mora.

A trade war over tomatoes was averted twice since the 1990s, most recently in the 2013 deal that put a price floor on Mexican tomatoes sold in the United States while barring U.S. growers from pursuing anti-dumping charges against Mexican exporters.

Fruit and vegetable growers in the southeastern U.S. had persuaded the Trump administration to seek the ability to impose seasonal anti-dumping duties against Mexican produce in negotiations to update the North American Free Trade Agreement. But this demand was withdrawn in the final talks over the U.S.-Mexico-Canada trade deal reached last October.

A month later, the Florida Tomato Exchange, which represents growers in the state, had petitioned the Commerce Department to terminate the 2013 tomato pact. It argued that the agreement could not be enforced and contained too many loopholes through which Mexican growers could dump tomatoes in the U.S. market.

Reporting by Lizbeth Diaz and Anthony Esposito; editing by Christian Schmollinger

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