According to the Florida Tomato Exchange in a prepared statement, the new agreement provides for unprecedented measures and enforcement measures that will help protect U.S. tomato growers from mexican tomatoes that are subject to harmful dumping. The rest of the article is organized as follows. Section 2 provides general information on the tomato dispute and minimum pricing policy. Section 3 develops a theoretical three-country trade model, which includes minimum import price policy. Section 4 describes the data and calibrates the parameters used in the empirical analysis. Section 5 presents the empirical results. Section 6 summarizes the article and outlines the main implications of the results. 3. shipping in a form of packaging that is not typical of tomatoes destined for the fresh market (e.g.B. bulk containers greater than 50 lbs.) – Examples of typical forms of packaging in the fresh market and in the box weight table in Schedule C of the agreement; and in a statement, the Florida Tomato Exchange said it welcomed the signing and welcomed the strict rules for monitoring, enforcing and circumventing the agreement, including border controls, which should help eliminate violations of U.S. tomato growers caused by “dumping” Mexican tomatoes. The suspension agreements were intended to avoid further dumping and harm to the U.S.
tomato industry. However, producers in the southeastern United States stated that the agreements were not successful in achieving this objective, either because the provisions were unenforceable or because they were subject to loopholes. In light of these concerns, the Florida Tomato Exchange filed an application in November 2018 to terminate the 2013 suspension agreement with the Department of Commerce. Although Mexico exports a variety of seasonal products to the United States, ranging from peppers to blueberries, it is the tomato trade that has been a constant source of tension. This is because tomatoes are one of the most valuable vegetable plants in the United States and Mexican tomatoes compete directly with tomatoes grown in winter and early summer in the state of Florida. The impact of the higher minimum price of the suspension agreement on the Mexican tomato field market is considerable. This policy severely limits Mexican exports of country tomatoes to the United States by 11.02%. As a result, Mexico sells more domestically, reducing producer and consumer prices by 14.01% and 3.95%, respectively.
Lower prices lead to a 1.32% drop in supply and a 4.53% increase in demand. For U.S. imports and exports, we used USDA-ERS (2016) information separating data from greenhouse tomatoes, roms, rounds, cherries and grape tomatoes. To obtain estimates for country tomatoes, we combined Roma and round tomatoes. For Canada, we used Statistics Canada (2016) data to determine import and export data, and for consistency reasons, we compared this data with U.S. imports from Canada. Since Mexico does not provide trade data, we used data for U.S. and Canadian tomato trade with Mexico and information from Cook and Calvin (Reference Cook and Calvin2005), suggesting that Mexicans consume only 15% of domestic greenhouse tomatoes.
Finally, consumption was determined as domestic production plus imports minus exports. This is an agreement between the U.S. Department of Commerce (USDOC) and the signatory producers/exporters of fresh tomatoes grown in Mexico. The first suspension agreement on fresh tomatoes from Mexico came into force on 1 November 1996. THE USDOC and the Mexican signatories signed new agreements in 2002, 2008 and 2013; the last agreement was reached on 19 September 2019 and came into force.