The tiff is the latest trade spat between the United States and Mexico, partners who joined forces to sign the historic North American Free Trade Agreement nearly 20 years ago. And now the two are among 11 countries pushing to finalize the new Trans-Pacific Partnership, which could become the largest trade pact in U.S. history.
Members of the Arizona congressional delegation, reflecting the state’s close proximity to Mexico, wanted to keep the rules intact and urged the administration not to rush into anything, particularly before the election. And Wal-Mart had sided with the Mexican growers as well, saying they had provided a predictable and steady supply of tomatoes for the U.S.
But the Florida growers won backing from the Florida congressional delegation and from workers and government officials across the country, including in California, Texas, North Carolina, South Carolina, Pennsylvania, Virginia, Tennessee, Georgia, Ohio and Illinois.
In a letter to the Commerce Department, Armando Elenes of Delano, Calif., vice president of the United Farm Workers, said the 1996 agreement had “failed miserably” to address unfair trade practices by Mexican growers, and he said that keeping it intact could threaten gains won for thousands of farm workers in recent labor contracts.
Instead of changing the trade rules, Mexican growers said, the U.S. industry needs to be more efficient and make better use of technology to compete.
Ley said Florida growers have become “less and less and less relevant in the marketplace” as Mexican growers – unlike their U.S. counterparts – have developed new varieties of tomatoes that are tastier and more popular. Mexican growers say they also have an advantage with lower labor costs, along with better soil, weather and growing conditions.
“They’re irrelevant because they are not evolving with the industry – the industry has evolved dramatically,” Ley said. “All they have to do is evolve and stop spending money on lawyers in Washington, D.C.”
And he warned that no one will win if consumers are forced to pay higher prices. “Before the consumer pays $5 or $6 a pound for tomatoes, they will go and consume another vegetable,” Ley said. “The consumer is going to walk away from the tomato industry. Even if Florida wins, they win nothing because they’re going to destroy the industry.”
The two sides are sparring over a 16-year-old agreement that came after the signing of NAFTA, which eliminated tariffs on imported tomatoes from Mexico and resulted in a flood of imports. Under pressure from the Florida growers, the Commerce Department began an investigation into whether Mexican growers were dumping their tomatoes on the U.S. market by selling at below-market prices. But federal authorities suspended the agreement when Mexican growers agreed to a minimum price, and the so-called “suspension agreement” has remained on the books ever since and been renewed twice, in 2002 and 2008. Scrapping the agreeement now would allow the government to reopen the dumping investigation.
The Commerce Department said it planned to consider any new facts in the case before issuing a final ruling in the next few months.