Florida tomato growers, pressed by Mexican competition, win U.S. support to seek import duties
Is a Florida vs. Mexico trade war about to start over tomato prices?
Wake up and good morning. If you listen to Florida's tomato growers, the state industry is in peril because a 16-year agreement with Mexico is out of date and resulted in tomato imports undercutting the prices of the crop grown in the Sunshine State. The U.S. government apparently agrees. The U.S. Commerce Department just issued a temporary decision to end that 16-year pact with a final decision coming next year.
Without a deal, Florida growers can now seek duties on Mexican tomatoes. Read more from this Bloomberg story. Roughly half of the tomatoes eaten in the United States are from Mexico.
There are interesting players on both sides of this squabble. Mexican officials note the Commerce action -- pleasing to Florida agriculture interests -- comes just ahead of a presidential election in a key swing state. Mexico's warned a trade war is possible, pointing to a U.S.-Mexico trucking dispute recently resulting in $2.4 billion in tariffs imposed on U.S. goods.
Then there's the world's largest retailer. Wal-Mart relies heavily on the Mexican tomato in its grocery stores and wants to keep things just as they are.
Florida Tomato Exchange executive director Reggie Brown, who represents Florida tomato growers, is not impressed. As quoted in the Financial Times, Brown said: "The domestic industry has jumped through every hoop put in our path by our opponents who simply want to protect the sweetheart deal they've enjoyed for far too long." Which seems to beg the question: If it was a sweetheart deal, why has it taken 16 years for the Florida tomato industry so long for its complaints to be heard?
Florida's tomato industry once generated $500 million but has dwindled over the years to $250 million, Brown told the New York Times here. The same story cites Mexico claiming their tomatoes are vine ripened while Florida's crop is picked green then gassed with ethylene to turn them red.
Brown told the Washington Post here that three major Florida growers abandoned the business last year and those that remain will probably lose between $100 million and $200 million.
The current agreement had set a price for Mexican tomatoes at 17 cents a pound during the summer and 21.6 cents a pound during the winter. U.S. growers say they cannot compete at those prices.
Sounds like the first inning of a long game.
-- Robert Trigaux, Business Columnist, Tampa Bay Times