WASHINGTON — The United States and Mexico have reached tentative agreement on a pact that could avert a feared trade war over tomatoes, but would sharply raise prices in the process.
The agreement, published in Friday’s Federal Register, calls for Mexican growers to raise the base price of tomatoes sold in the U.S., in exchange for authorities here dropping an investigation into whether the Mexicans were selling tomatoes below cost.
Importers in Arizona said the higher prices would likely mean fewer sales, and the ensuing drop in imports would have an economic ripple effect in Nogales and other ports of entry.
But Florida growers, who originally called for the investigation into Mexican pricing, said they are cautiously optimistic that the decision will help their industry.
“I don’t think we’ll see monumental growth in the industry. It’s really about preservation at this point,” said Matt Joyner, director of federal affairs for the Florida Department of Agriculture.
Growers across the United States need this protection because they simply cannot compete with tomatoes sold below the production price, Joyner said.
But the “outlandish” price hikes proposed in the deal could hurt U.S. companies that package and ship tomatoes, other officials said.
Arizona tomato importers are worried they will lose their grocery store contracts to Florida companies because of the prices called for in the proposal, said Lance Jungmeyer, president of the Fresh Produce Association of the Americas.
“It’s going to have an immediate impact,” Jungmeyer said.
He said that in 2011, $1 billion in produce passed through Nogales, the largest port of entry for fresh produce into the U.S., and that tomatoes typically account for about one-third of that traffic.
If trade is reduced by 10 or 20 percent, Jungmeyer said, Nogales would see a proportionate decline in employment and a negative ripple effect within suppliers.
“People in town are worried,” he said.
But while the association plans to file comments on the proposal, Jungmeyer thinks it is unlikely the final deal will change.
“I think this is the best deal we’re going to get,” he said.
Bret Erickson, vice president of the Texas International Produce Association, agreed with Jungmeyer that while the deal is not perfect, it is still better than the trade war that might have broken out. The disagreement over tomatoes could have carried over to other commodities and hurt other industries, he said.
“We’re pleased to see that we’re close to avoiding a trade war,” Erickson said.
But the cost of avoiding a trade war could be higher prices for consumers.
“If they want great-tasting tomatoes that Mexico grows, they will be paying higher prices,” Erickson said.
Mexican tomatoes are vine-ripened while those in Florida are picked green and ripened with gas, he said.
A study by the Nielsen Perishables Group for the Fresh Produce Association of the Americas predicted that in the winter the price of greenhouse tomatoes could double and the price of field tomatoes could increase about 50 percent.
- 7 common ways to get sued by your employees
- Why it might be time to upgrade your toilet
- Arizona teachers are building a better future by using technology in the classroom
- How to make summer reading fun for the whole family
- How to find relief for chronic joint pain
- Can the NBA Lottery save the Suns?
- Skip Urgent Care: 5 ailments you can treat with telemedicine
- Skin Cancer in Arizona: Stats, facts and new immunotherapy drugs making strides
- Distracted walking injuries end up not so funny
- Scary situations: 5 quick tips before you let a contractor in your home
- Four ways telemedicine is changing the health care industry
- 5 mistakes homeowners make in the spring
- Three rivers run through it: Exploring Arizona's waterways
- Smart home basics: things you need to know to get started
- 5 Surprising things causing back pain
- Arizona agriculture is a $17.1B industry
- Timeline: Arizona's roots in brewing history
- 5 reasons to love the D-backs this season
- Tips for taking your home entertainment experience to the backyard
- Tech-related injuries your parents never experienced
- Workers comp: Signs your co-worker could be a fraud
- Who's the real founder of America's pastime?
- Epidemic rising? What you need to know about Alzheimer's in Arizona
- 5 unforgettable Wooden Award winners
- Family and hard work are keys to success of modern dairy farmers
- Genetic testing could hold answers for colon cancer survival
- Cold beers and baseball: A beer lover's guide to Spring Training
- Telecommuting: 5 tips to make it work for employers and employees
- See how top CFOs feel about economic growth in the Valley
- Migraine myths that keep patients from effective treatments