Obama's Tomato War Against Mexico: Policy or Politics?
The Commerce Department has sided with US farmers from the key swing state of Florida in a trade dispute against Mexican tomato producers.
MINYANVILLE ORIGINAL Tomato lovers, brace yourselves for a potential price increase in the coming winter.
Heeding the requests of US farmers, the Commerce Department has taken the first step towards ending a 16-year trade pact between the US and Mexico, which has kept prices of Mexican tomatoes low for American consumers.
Florida tomato growers, through the Florida Tomato Exchange, and other petitioners, had launched a complaint in June to the Obama administration that they were not able to compete with the prices of Mexican tomatoes, which they said were below the cost of production.
Last week, the Commerce Department reached an initial decision and issued a preliminary recommendation to end the agreement. It also said that a final decision on whether or not to terminate the agreement would be made in no more than 270 days.
The agreement between the US and Mexico is complex, and dates back to 1996. NPR explains:
[T]he Commerce Department's stance isn't so direct as to say, "This trade deal is now null and void."
Instead, the agency is recommending (bear with me) the end of the suspension of an investigation into Mexican exporters' "dumping" tomatoes on the US market. That inquiry started in 1996, the same year it was suspended and an agreement on prices that were not "lower than fair market value" was reached.
Since then, the agreement has been slated for the chopping block several times, only to be continued under new terms after the antidumping investigation is suspended anew.
"The current deal is a cover for ongoing massive dumping," Terence Stewart, managing partner at Stewart and Stewart, who is representing some of the US tomato producers, told the Wall Street Journal. Reggie Brown, executive vice president of the Florida Tomato Exchange, noted that sales of Florida tomatoes have plunged to $250 million per year from a high of $500 million since the agreement was signed in 1996.
Unsurprisingly, Mexico is less than pleased by the Commerce Department's decision.
"We are extremely disappointed," said Ricardo Alday, spokesman for the Mexican Embassy, adding that the decision seemed to be "dictated by politics rather [than] sound policy."
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