WASHINGTON — The U.S. Department of Commerce says it’s reached a tentative deal with Mexican tomato producers to prevent unfairly cheap produce from reaching American consumers, heading off a potential 25% tariff.
Secretary of Commerce Wilbur Ross said Wednesday the draft agreement “meets the needs of both sides.”
The draft agreement sets minimum prices for Mexican tomatoes, including a 40% premium on organic imports.
The pact also closes loopholes from past suspension agreements that allowed sales below the reference prices, and includes a brand-new inspection mechanism to prevent the importation of low-quality, poor-condition tomatoes from Mexico, “which can have price suppressive effects in the market,” the Commerce Department said.
In addition, the draft agreement allows the department to audit up to 80 Mexican tomato producers per quarter, or more with good cause.
The final deal has to be signed by Sept. 19 in order to definitively suspend an investigation that could have led to the tariffs. The probe into alleged dumping and price suppression began at the request of the Florida Tomato Exchange.
Commerce says the deal with benefit tomato producers across America, including those in Florida, Texas and Arizona.
Tomatoes are the single largest commodity imported through Nogales, with over 1.5 billion pounds imported each year at an estimated value of nearly $2 billion.
Arizona Sen. Martha McSally, R-Tucson, and Sen. Kyrsten Sinema, D-Mesa, wrote a letter to Secretary Ross on Aug. 13, expressing concern over proposals to require stepped-up U.S. inspections of Mexican tomato shipments as part of a renewed suspension agreement, which the senators said could slow commerce and cost Arizona jobs.
“This new agreement will protect Arizona companies from paying an astronomical price to ship tomatoes and will most importantly, keep Arizonans employed,” McSally said in a prepared statement Wednesday. “This goes a long way to safeguard affordable prices for families at the grocery store and maintain our strong cross-border commerce.”
The Arizona Chamber of Commerce, the Border Trade Alliance and the Fresh Produce Association of the Americas also lauded the tentative agreement, though the Border Trade Alliance said it remained opposed to any new inspection requirements.
“While we are relieved that new duties and higher prices will not continue to be passed on to U.S. importers and consumers, we are wary of any new mandated inspection regime that could dramatically slow processing times of tomato imports at U.S. ports of entry and put freshness and quality at risk,” Border Trade Alliance President Britton Clarke said.