Fresh Produce Association of the Americas Comments on Tomato Suspension Agreement Proposal Antitrust Concern
NOGALES, AZ - Pound for pound, the commentary, research, and debate around the Tomato Suspension Agreement Proposal is one of the most dynamic conversations I have witnessed since I started in the industry a mere eight years ago. One of the voices in constant and passionate engagement around the debate comes from the Fresh Produce Association of the Americas/Tomato Division (FPAA/TD).
Recently, the FPAA/TD shared its evolving view on the issue noting that the Tomato Suspension Agreement proposed by the U.S. Department of Commerce in July carries “flawed provisions that infringe upon federal laws and are unlikely to survive antitrust and other legal actions that are sure to arise.” The Mexican growers’ proposal from August 5, as shared by the association, identifies a path forward that greatly reduces FPAA’s antitrust concerns.
“We have made two trips to Washington to meet with the Department of Commerce to explain how the Commerce proposal gives unfair advantage to one type of U.S. seller of Mexican tomatoes over other U.S. sellers of Mexican tomatoes, yet the unjustifiable provisions remain,” FPAA President Lance Jungmeyer, stated. “The Commerce proposal would allow repackers to profiteer on the condition of Mexican tomatoes at destination. By contrast, the new Mexican proposal provides a clear path to remove defective tomatoes from the marketplace. This is a step in the right direction.”
To read the Mexican growers’ proposal from August 5, please click here!
The FPAA added that written comments have been submitted and in a recent meeting with Commerce, FPAA has stated that it believes Commerce is going beyond its statutory authority, particularly with sales price adjustments for defective tomatoes. The example given by the FPAA noted that “Commerce’s proposal tramples on the rights of U.S. buyers and sellers of Mexican tomatoes to claim damages for breach of contract, which are protected under U.S. law, including the Perishable Agricultural Commodities Act (PACA).”
Jungmeyer went on to share more background that informs the FPAA's position.
“When Congress passed PACA in 1937 and gave USDA jurisdiction to protect the rights of sellers and buyers of perishable agricultural commodities, it never imagined that another government agency like Commerce would decide that some American companies would get protections, while others would not,” Jungmeyer reflected, adding that this would be outside the scope of dumping law.
In addition, the FPAA firmly believes a new suspension agreement must remove the mandate for USDA to inspect every imported lot of Mexican tomatoes—an action that the Mexican government has said would invite reciprocal inspections on U.S. agricultural products. In the FPAA’s eyes, inspections of Mexican tomatoes would accomplish nothing because USDA records show that 99 percent of tomatoes meet standards upon arrival at customers’ warehouses and destinations.
The complex issues around the Tomato Suspension Agreement continue to be top-of-mind and at the center of conversations on multiple fronts. Keep checking back with AndNowUKnow as we continue to take the temperature from both sides of the aisle.