New Mexican tomato proposal finds cool reception by Florida growers

05:13PM May 23, 2019
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Mexican tomato growers proposed a new tomato suspension agreement to the Commerce Department on May 22, but Florida tomato growers gave it an icy reception.

The proposal was detailed in a May 22 letter sent by Sherman & Sterling, legal counsel for the Mexican growers, to Wilbur Ross, Secretary of Commerce.

Because Commerce terminated the prior agreement on May 7, the Mexican growers were required by Commerce Department regulations to make a formal proposal on May 22, according to a news release from the Mexican growers.

The Commerce Department declined comment on the status of negotiations.

According to the release from Mexican tomato growers, the newest proposal builds on the strongest provisions of the prior agreement and an April 2 plan that was declined by the U.S.

Michael Schadler, executive vice president of the Florida Tomato Exchange, said in a statement that the group appreciates the Mexican growers’ willingness to negotiate, but the new plan is “a step backwards.”

Mexican tomato growers said their proposal includes:

  • New reference prices with increases of up to 180% for expanded categories;
  • Expanding the U.S. Department of Agriculture marketing order to cover all categories of tomatoes, triggering rejection at the border for Mexican tomatoes that don’t meet marketing order guidelines;
  • Return of defective products to Mexico over a certain threshold and destruction supervised by USDA for the remainder;
  • Elimination of sales under another company’s signatory number to deter circumvention;
  • Submission of sales, volume, customer and contract data, all subject to Commerce Department verification;
  • Linking suspension agreement provisions to Perishable Agricultural Commodities Act penalties; and 
  • Civil penalties for submission of false statements.

The release said the only area the Mexican growers have not considered is the request by the Florida Tomato Exchange to “restrict the rights of U.S. buyers to liquidated damages for breach of warranty.”

“While breaches of warranty do not occur often, the Mexican growers do not have the legal right to deny damages,” Mexican tomato growers said in the release.

“We submitted a very strong proposal to Commerce in April. Since then, we have made limited progress in the negotiations,” Rosario Antonio Beltran, president of the growers’ association in the state of Sinaloa, said in the release. “We hope that Commerce looks closely at this proposal to see how powerful it is.”

Florida tomato interests say the latest Mexican tomato proposal still falls short.

“It withdraws proposals they had made to the Commerce Department in early May,” Schadler said in the statement. “We do not understand why the Mexican growers continue to reject the good faith efforts of the Commerce Department to negotiate a new suspension agreement.”

The Florida Tomato Exchange statement said the Commerce Department’s May 10 proposal is the basis for an agreement that will prevent unfair Mexican trade practices from injuring American tomato producers while continuing to allow Mexican tomato growers to access the U.S. market.

“The latest Commerce Department proposal would be an improved agreement for both sides,” the statement said. “The domestic industry simply will not support any proposal that does not stop the injury to American growers by dumped Mexican tomatoes.”