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Mexico's Tomato Growers Submit Proposal for New Tomato Suspension Agreement

Mexico's Tomato Growers Submit Proposal for New Tomato Suspension Agreement

WASHINGTON DC and MEXICO - The proverbial ball that is a possible new Tomato Suspension Agreement is now in the U.S. Department of Commerce’s court once again, with Mexico’s growers and the counsel that represents them having submitted a proposal yesterday, May 22.

According to the submission, May 22, 2019, compatibility of the agreement with the statutory requirements by June 6, 2019, allow the opportunity for comment until June 26, 2019 and “will determine whether to accept an agreement to suspend the investigation by July 6, 2019.”

The Mexican industry proposes, in the event of this, to be in Washington D.C. for discussions beginning on June 3, 2019, saying it is prepared to answer any of the Department’s questions in the meantime.

 Mexico’s growers and the counsel that represents them have submitted a proposal for a new Tomato Suspension Agreement yesterday, May 22, 2019

“A recent report by the U.S. Department of Agriculture finds that import prices for fresh tomatoes from Mexico are above the reference price, often significantly. Economist reports and testimony before the U.S. International Trade Commission find that Mexican pricing in the U.S. market is having no impact on Florida growers and that Mexican tomatoes sell for a premium over all U.S. producers,” the attached proposal notes. “In this context, the Mexican signatories have developed proposals on both sides of the border focusing on enforcing the arrival condition of the first sale. This will serve to significantly strengthen the U.S. market, especially at peak season when volumes and inventories are at their highest point and FTE faces the most pressure.”

In the proposal, Mexican growers address:

  • Reference Prices
  • Treatment of Liquidated Damages for Breach of Warranty
  • Enhanced Export Management
  • Enhanced Enforcement by USDA under an Amended Federal Marketing Order
  • Enhanced Enforcement by USDA under PACA
  • Enhanced Enforcement by the Department
  • Necessary Measures to Avoid Needless Litigation

The agreement reiterates previous contentions that the FTE’s proposal on Appendix D of the 2013 Agreement, as articulated in multiple submissions on the record of the proceeding, “misunderstands its purpose, the calculation, and the legal requirements,” saying it runs counter to U.S. law, including but not limited to, antitrust, PACA, and U.S. antidumping laws.

Instead, revisions are proposed to the existing Appendix D that removes 100 percent of defective product from the U.S. market and penalizes only the Mexican signatories for any bad arrival condition.

In the proposal, Mexican growers address reference prices, treatment of liquidated damage for breach of warranty, enhanced export management, and more

For further details of these conditions, and others in each of the above reference points, click here for the complete document.

In the Necessary Measures to Avoid Needless Litigation, Mexico’s growers punctuate that all proper notice and comment procedures must be followed, including the timely release of all required Department memoranda.

“We look forward to working with the Department and have served a copy of this submission on the parties listed on the attached certificate of service,” the cover letter concludes.

Will this latest submission mean a new agreement as we get into the beginning of summer? AndNowUKnow will report as more becomes known.