The U.S. Mexican Winter Market Trade Dispute

On March 11, 1996, the Florida Fruit and Vegetable Association, the Florida Bell Pepper Growers Exchange, the Florida Farm Bureau, the Florida Department of Agriculture and Consumer Services and other U.S. tomato producers filed a petition with the International Trade Commission (ITC) for economic relief from the effects of increased tomato imports from Mexico under Section 202 (a) of the Trade Act of 1974. A second petition was filed with the U.S. Department of Commerce under Section 733 (a) of the U.S. Tariff Act of 1930, charging that Mexican tomatoes were being dumped on the U.S. market at prices less than fair market value (LTFV) and were the cause of material injury to the domestic industry. Florida growers blame their recent loss of market share and depressed prices during the 1995-96 winter season on NAFTA, the North American Free Trade Agreement. The reduction in trade barriers due to NAFTA allegedly resulted in a flood of Mexican tomato imports, which have depressed domestic prices and resulted in declining profits, employment and investments. These allegations constitute the legal criteria for a petition seeking economic relief from imports sold at less than fair market value. The ITC investigated the first petition and rejected it on July 2, 1996. The antidumping petition continued during the summer and fall, 1996, until trade negotiations resulted in a compromise agreement that suspended the investigation. On October 11, 1996, the U.S. and Mexican tomato growers reached an agreement suspending the dumping case and establishing a minimum import price for fresh tomatoes at $0.2068 per pound ($0.45/kg) or $5.17 per 25-pound box. The price floor appeared low enough to allow for competitive improvements and disposal of temporary oversupplies in the market. Thus the wholesale price of tomatoes from the two regions would be approximately equivalent, restoring a "level playing field."