September 28, 2012
Fears of a trade war between the United States and Mexico escalated on Thursday following a preliminary decision in the politics of tomatoes. In a surprising and premature ruling, the Commerce Department sided with Florida tomato producers in terminating an agreement that has set a minimum price on Mexican tomatoes imported into the United States over the past 16 years.
The Mexican Government has already threatened to retaliate, with ramifications for other commodity producers caught in the cross-fire. Earlier this week, Secretary of Economy Bruno Ferrari had promised that if the United States makes a hasty decision, instead of conducting a standard 270-day review, “Mexico will use all our legal means to defend our producers.” A final ruling could also endanger talks over other bilateral trade disputes.
For Mexican tomato growers, termination of the agreement would allow U.S. growers to file formal complaints accusing the Mexicans of unfair trade practices, which they did repeatedly before the agreement’s adoption in 1996. The Mexicans argue that they are being punished for their success—for growing a superior product and for honoring the pact over 16 years.
Thursday’s announcement seemed particularly harsh given the timing: Mexican tomato producers were scheduled to meet with officials at the Commerce Department on Friday to discuss ways to resolve the dispute. The growers have said they are willing to accept a higher floor price for their tomatoes.