Proposed agreement squashes U.S., Mexico tomato war

WASHINGTON -- A proposed agreement on fresh tomatoes imported from Mexico would strengthen anti-dumping enforcement and reset minimum wholesale prices, the Commerce Department said.

The agreement with Mexico's tomato industry would suspend an investigation initiated after Florida tomato growers complained that Mexican producers were selling fresh tomatoes for less than the production cost.

The proposal would replace a pact that's been in place for 16 years. The Commerce Department on Saturday released a draft of the agreement for public comment.

Agriculture Secretary Tom Vilsack says it would allow the U.S. tomato industry "to compete on a level playing field."

U.S. tomato growers are tentatively backing the proposal. Edward Beckman, president of Certified Greenhouse Farmers, said the new agreement must address pricing, coverage and enforcement of trade laws.

"We believe that the Department of Commerce and Mexico have struck a deal that meets those three tests, and we're hopeful and optimistic that we'll be able to compete under fair trade conditions," Beckman said in a statement released Sunday. "Much work remains to have the agreement fully and faithfully implemented, and continuous monitoring and enforcement will be critical.

Florida produces much of the nation's winter tomato supply, and Florida growers were asking the Commerce Department to end the fresh tomato importation trade agreement. The Florida growers claimed their Mexican counterparts have been "dumping" -- selling for less than the cost of production -- their product in the U.S., driving down prices and costing jobs. The growers' complaint had the support of farmworker representatives.

The impact of the agreement on consumers was unknown, but an Arizona-based trade association, which sponsored a pricing study, warned that if Mexican tomatoes withdrew from the U.S. market, the prices for some hothouse tomatoes would double from $2.50 a pound to nearly $5.

Mexico's economic secretary commended his country's tomato growers on the proposed settlement in a tweet Sunday.

"Congratulations to Mexican tomato producers for the agreement reached and the suspension of the U.S. government antidumping investigation," was the statement on the Twitter account of Mexican Economy Secretary Ildefonso Guajardo.

U.S.-produced fresh and processed tomatoes account for more than $2 billion in cash receipts. Mexico's tomato trade with the U.S. was worth more than $1.8 billion in 2011.