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Mexico, US Agree on Tomato Duties

Mexico, US Agree on Tomato Duties

MEXICO CITY (Dow Jones) — Mexican tomato growers reached a last-minute deal with the U.S. Commerce Department that will suspend an antidumping investigation and remove duties on U.S. imports of Mexican tomatoes in exchange for Mexico raising prices and submitting to inspections.

Mexican tomato growers said the agreement was reached minutes before a Tuesday midnight deadline, and now has a 30-day period for comments before taking effect.

In May, following complaints last year from U.S. tomato growers, the U.S. Commerce Department terminated a suspension agreement with Mexican producers under which antidumping duties on Mexican tomatoes had been avoided since 1996.

The Commerce Department reactivated an antidumping investigation and determined a 25.3% preliminary dumping margin for Mexican tomatoes, above the 17.5% set in 1996. A final determination was due Sept. 19.

Once the new agreement goes into effect, imports of Mexican tomatoes will be duty-free, and exporters will be able to recover cash deposits made since May 7, the Mexican growers said.

Mexican Economy Minister Graciela Márquez said in a Twitter post that the agreement “is good news that will keep the market open for our tomato exports to the U.S.”

The agreement includes inspections for quality of 92% of the truckloads of Mexican tomatoes entering the U.S., a controversial proposal that had been a sticking point in the negotiations, as well as increases in minimum reference prices for Mexican tomatoes.

U.S. tomato producers expressed backing for the agreement.

“We support the draft agreement and recognize the significant concessions made by all sides involved to get to the initialing,” said Michael Schadler, executive vice president of the Florida Tomato Exchange, which represents U.S. growers. “The Commerce Department should be commended for its hard work to seriously address the concerns of the domestic industry.”

Mexican exports of fresh tomatoes to the U.S. have more than doubled in recent decades and were valued last year around $2 billion. Mexico supplies about half of the fresh tomatoes consumed in the U.S., which buys about 95% of Mexican tomato exports.

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