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US, Mexico agree to end dispute over tomatoes

Trade war could have hurtmany US businesses

The deal raises the minimum price at which Mexican tomatoes can be sold and strengthens enforcement of trade rules.

Tomas Bravo/Reuters/File

The deal raises the minimum price at which Mexican tomatoes can be sold and strengthens enforcement of trade rules.

NEW YORK — The United States and Mexico have reached a tentative agreement on cross-border trade in tomatoes, narrowly averting a trade war that threatened to engulf a broad swath of US businesses.

The agreement, reached late Saturday, raises the minimum price at which Mexican tomatoes can be sold in the United States, aims to strengthen compliance and enforcement, and increases the types of tomatoes governed by the bilateral pact to four from one.

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“The draft agreement raises reference prices substantially, in some cases more than double the current reference price for certain products, and accounts for changes that have occurred in the tomato market since the signing of the original agreement,’’ Francisco Sanchez, undersecretary of commerce for international trade, said in a statement.

The agreement will be open for public comment until Feb. 11. The Commerce Department estimated it would go into effect March 4.

Estimates are that nearly one of every two tomatoes eaten in the United States comes from Mexico.

Last fall, Florida tomato growers asked the Commerce Department to end a 16-year-old agreement that suspended an anti-dumping investigation that began in the mid-1990s. The agreement had been amended several times, but Florida growers contended it set the minimum price of Mexican tomatoes so low they could not compete.

The Florida growers said the new agreement addressed their three main concerns: pricing of Mexican tomatoes, the number of growers covered, and enforcement.

Florida growers said the agreement addresses their main concerns: the pricing of Mexican tomatoes, the number of growers covered, and enforcement.

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‘‘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,’’ Edward Beckman, president of Certified Greenhouse Farmers, said in a statement.

‘‘Much work remains to have the agreement fully and faithfully implemented and continuous monitoring and enforcement will be critical.’’

The new agreement covers all fresh and chilled tomatoes, excluding those fruits intended for use in processing like canning, dehydrating and juices, sauces, and purees.

It raises the basic floor price for winter tomatoes to 31 cents a pound from 21.69 cents, higher than the price the Mexicans were proposing, establishing even higher prices for specialty tomatoes and tomatoes grown in controlled environments.

The Mexicans have invested billions in greenhouses to grow tomatoes, while Florida tomatoes are largely picked green and treated with a gas to change their color.

The Mexican and US governments both will implement mechanisms to increase enforcement.

The dispute unfolded in the heated politics surrounding the presidential election, with Mexican growers charging the Commerce Department was courting voters in the important swing state of Florida. Instead, the timing of the negotiations ensured the government could win those votes and bring the imbroglio to a conclusion satisfactory to the Mexicans after the election was over.

The Mexicans enlisted roughly 370 US businesses, ranging from Walmart to various meat and vegetable producers, to argue their cause. Those businesses feared a bitter trade war like the one the Mexicans waged over trucking, which imposed stiff tariffs on US goods headed south.

If the old agreement had expired, it would effectively have triggered the resumption of the anti-dumping investigation, and so Mexico fought hard for a new agreement, offering to substantially raise the price and increase the number of Mexican growers covered by it.

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