Hands off Mexican tomato imports, says local and international stakeholders

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PHARR — The U.S Department of Commerce intends to terminate a functional agreement with produce exporters from Mexico, which could result in the price of tomatoes increasing by 50%.

The Tomato Suspension Agreement ensures that exporters in Mexico sell their tomatoes at or above a set reference price in an effort to prevent undercutting U.S. growers’ business. Additionally, these imported tomatoes are subject to inspections to certify that they meet quality requirements. In return, the U.S. does not impose anti-dumping on imported tomatoes.

Anti-dumping is a protectionist tariff placed on inexpensive imports.

With the agreement’s fate on the horizon, South Texas officials, representatives from the Texas International Produce Association and various stakeholders met Thursday at a produce house in Pharr to discuss a 20% anti-dumping tariff proposed on Mexican tomatoes entering the U.S.

The tariff will go into effect after July 14.

Hidalgo County Commissioner Pct. 4 Ellie Torres encouraged the public support of HCR108, which would urge the Department of Commerce to maintain the agreement instead of terminating it.

Why does this matter?

“This tariff will have a devastating impact on the region, particularly, in the Rio Grande Valley,” said Torres.

According to Torres, 50% of Mexican tomatoes entering the U.S. pass through ports of entry in Pharr, McAllen, Roma and Laredo. This industry supports 32,000 Texas jobs and contributes over $4 billion to the state’s economy.

“We anticipate that with this tariff, the price of tomatoes will increase to about 50%,” said Torres. “This will have a far-reaching effect on everyday products and meals. Items like chips and salsa, salads, burgers — really any food that contains tomatoes, will see a significant price increase.”

Torres argued that this will not only raise the cost of living and place a financial strain on Texas families, but will threaten thousands of jobs to a “catastrophic” extent. She says the dangers of this tariff could spark a ripple effect felt by all sectors of the Texas economy.

“This isn’t just a trade issue. It’s about preserving the economic future of South Texas,” she added.

Association CEO and President Dante Galeazzi, said that every $1 of Mexican tomatoes imported into the U.S. produces $2.67 in economic return.

Galeazzi believes tomato producers in Florida can not solely satisfy the demand in the U.S.

“Ultimately, it would not allow Americans to consume fresh tomatoes the way we have grown up,” said Galeazzi.

Galeazzi went on to explain that Mexico has invested billions of dollars into infrastructure, particularly greenhouses, that allows them to grow tomatoes year-round, even in times of the year when the climate is unfavorable.

According to the Fresh Produce Association of the Americas, innovation in the world of tomato growing allows consumers to choose from a wide variety of vine-ripened grape and cherry tomatoes, tomatoes on the vine, Roma tomatoes and other specialty tomatoes, which they fear the termination of this agreement could end.

With this lack of superior infrastructure in the U.S., American companies can become dependent on their neighbors south of the border, according to a handout provided by the Washington-based law firm Akin Gump Strauss Hauer & Feld.

Akin Gump, which represents the Associations of Mexican Tomato Growers, argues that the 2019 agreement between the Department of Commerce and various Mexican importers is “the most heavily monitored,” and cited quarterly certification requirements as well as audits, annual reviews and “random questionnaires” in addition to mandatory border inspections.

Citing a Texas A&M study, Akin Gump says Mexican tomatoes pass border inspections at a 99.25% rate, and make up 90% of total tomato imports.

Enter the Florida Tomato Exchange, or FTE, which cites inflation, “unfair trade practices,” and “burdensome regulations” for advocating for the end of the agreement.

The FTE argues that none of the numerous tomato trade agreements dating back to 1996 have stopped the “injury” of inexpensive tomato imports from Mexico.

Akin, however, says the Department of Commerce did not find any violations of the 2019 agreement, and that tomato trade with Mexico adds billions to the U.S. economy annually while supporting thousands of American workers.

Currently, Galeazzi, Torres and their respective teams are having educational conversations directly with the Department of Commerce and engaging with senators and congressional representatives to seek support in the preservation of the agreement.

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