The USA and Mexico have signed a preliminary agreement on cross-border tomato trade that allowed both countries to avoid the “tomato war”. As the New York Times reports, this agreement was forwarded to the US Department of Trade and Commerce.
The agreement stipulates the minimum prices for all kind of tomatoes imported from Mexico. The agreement covers both fresh and frozen tomatoes. The previous agreement concluded 16 years ago covered only one type of tomatoes.
The demand for review of the previous agreement came from farmers from Florida engaged in tomato production business. They accused Mexico of damping. According to the tomato growers, the south neighbor sells tomatoes at the price lower than its production cost in the USA. Meanwhile, the 16-years-old agreement did not give the United States the right to conduct the antidamping investigation.
Farmers claim that they would agree to the new agreement between the USA and Mexico if it is followed. The discussion of the new agreement activated in October 2012 amid the presidential election in the USA. At the same time American authorities started blocking import of Mexican tomatoes. It gave all reasons to suppose that countries were about to start the “trade war”.
The USA is the largest importer of agricultural products including tomatoes from Mexico. Half of the tomatoes imported are from Mexico. The USA, Mexico and Canada are the parties of the North American Free Trade Agreement (NAFTA) and should gradually lower the trade borders. Nevertheless, Mexico and the USA have a lot of conflicts when one of the countries tries to block the import from another one to protect local producers.
