Mexico keep being him world’s largest tomato exporter cool, though with highly concentrated shipments to the US market.
The export of the mexican tomatoes It has had a record high of 1,086 million from January to April 2023, which means an increase of 25.9% compared to the first quarter of 2022, according to data from the United States Department of Commerce.
In 2022, Mexico exported more than 1.81 million tons of tomato to USA and represented around 91% of the tomato market imported by the United States, the rest is represented by Canada and various other Latin American providers.
However, the problems with competition with American producers have always been present, in 1996 we were sued by Florida tomato producers for selling at a price below the floor price established in the US (or its term in English “dumping”). the trade of tomato between Mexico and USA was threatened with a tariff and resources established in US law were used to negotiate an agreement to suspend the investigation and avoid paying tariffs that would increase the cost to the final consumer.
As background, the Tomato Suspension Agreement (AST) was signed on September 19, 2019 in an agreement between the United States Department of Commerce and the Mexican Tomato Producers, which is valid for five years, ending in 2024; The purpose of having the AST for the Mexican producer is to be able to export fresh tomatoes without paying tariffs antidumping 20.91% in general. It establishes obligations for Mexican producers when they cannot sell below a reference price established in the agreement, among other things it includes a border inspection of 92% of shipments to check the quality of tomatoes.
shipments of tomato sended to USA are inspected at the border upon entry to verify that they comply with US import regulations by agencies such as Customs and Border Protection (CBP), the Department of Agriculture (USDA), state departments of agriculture, and the Food and Drug Administration (FDA).
The agreement also establishes an increase in the price of organic tomatoes 40% above the price of conventional ones; as well as an increase in the reference prices for specialty tomatoes, which represents a protection in favor of the American tomato, only tomatoes destined for processing are exempt from the aforementioned reference price.
The agreement has been renegotiated four times since 1996 and this has allowed more than 700 exporting companies that have signed the agreement to continue participating in the market and continue to offer consumers, supermarkets and the food service industry the product of your choice with the highest quality and flavor.
The signatories of this AST are: The United States Department of Commerce (DOC), the Confederation of Agricultural Associations of the State of Sinaloa (CAADES), Tomato Product System (SPT), the Mexican Association of Protected Horticulture (AMHPAC), the Yaqui and Mayo Vegetable Producers Association (APHYM) and the Baja California Agricultural Council (CABC).
To export tomatoes, it is necessary to obtain an identification number (ID) as a Signatory of the Suspension Agreement of the Tomato 2019, said ID must be printed on the packaging and labels of the tomato boxes. To obtain it, it is necessary to meet a series of requirements such as being a fresh tomato producer, being a member of one of the signatory associations (CAADES, SPT, AMHPAC, APHYM or CABC), filling out a series of AST formats, sharing the RFC Certificate, Once the identification number has been obtained, the Signatories have the obligation to report their exports to the United States Department of Commerce every quarter. (DOC) and face the legal expenses through a pro rata per kilogram exported and a fixed fee per signatory for the defense of the signatures of lawyers in USA and in Mexico.
Even with all the measures, last Friday June 16, the tomato growers of Florida they asked the american government he terminate tomato suspension agreement.
Florida Tomato Exchange (FTE) asked the United States Department of Commerce terminate the suspension agreement Tomatociting that the Florida industry needs an order to protect its latest investments in technological development, arguing that the reference prices are too low and that the Mexican signatories have violated the Agreement hundreds of times, and that the buyers are reselling the tomatoes below the Reference Price.
He Agriculture department (USDA) said in a recent report that the Suspension Agreement of the Tomato ensures that signatory growers and exporters sell all fresh and chilled tomatoes to USA at the agreed reference price or above it.
In addition, the USDA projected that exports of tomato fresh from Mexico in 2023 they will be 2.06 million tons, with a significant increase of 5% compared to 2022, due to the higher expected production and the robust demand of USA.
Although all these arguments are questionable, to this day we do not know what decision the Department of Commerce (DOC), but assuming you decided to terminate the agreement, they would have to give us ninety days’ notice before the determined duty would go into effect for all imports coming from Mexico.
Notice has already been given to Mexican Government so that it activates its alert mechanism and it is possible to define what will be the best defense strategy for these cases with the law firms. lawyers that we have in the United States and in Mexico.
Jose Maria Gaxiola
Dir. The Trocadero CAADES
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