U.S.-Mexico tomato dispute could harm trade relationship

According to Detroit Free Press Columnist Tom Walsh, Florida tomato growers’ recent attempts to terminate the Tomato Suspension Agreement could have far-reaching consequences. The pact has kept the prices of Mexican and American tomatoes on fair footing in the marketplace by setting guidelines for Mexican tomato prices since 1996. Now that it’s once again election time in the swing state, the “long-dormant trade tussle” between the U.S. and Mexico is once again coming to the forefront.

Although the tomato trade dispute will likely not determine the state’s electoral votes, it has other significant implications. Half of all tomatoes consumed in the U.S., worth almost $2 billion a year, come from Mexico, according to Mexico’s Economy Minister Bruno Ferrari. According to Walsh, the tomato tussle is a reminder of how intertwined local politics and international trade are, and how these entanglements can lead to unforeseen consequences.

In June, as the 2012 presidential campaign was heating up, tomato growers represented by the Florida Tomato Exchange petitioned the Obama administration to lift the 1996 suspension so they can file a new antidumping case on Mexican tomatoes. Mexico’s Ferrari said Monday that growers timed their protectionist plea to coincide with political attention now focused on the election battleground state of Florida.

Free-trade proponents suggest that the tomato tiff could lead to a wider trade war, stunting two-way trade in many industries, including autos and auto parts.

This entry was posted in Border Bulletin, Economic Story. Bookmark the permalink.

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