Tomato Trade Pact: U.S., Mexico on Collision Course?

The United States and Mexico could find themselves in a trade war should the U.S. Department of Commerce terminate a 16-year old agreement that has kept prices of tomatoes low for many consumers who purchase fruit that is grown south of the border.

Florida tomato growers want to end a pact that was worth more than $1.8 billion to Mexico last year. The Associated Press said the decision to do so would allow U.S. growers to seek anti-dumping duties on imports of fresh tomatoes from Mexico.

The U.S. Department of Commerce on Thursday signaled it may end the 1996 agreement, leading to anger and frustration for Mexican officials and businesses. The federal government said it would make a final decision in no later than 270 days.

"We're disappointed. We're confused. We're frustrated. We're angry," Martin Ley, vice president of Del Campo Supreme, a family business that exported $60 million in tomatoes to the U.S. and Canada last year, told The New York Times. "We don't understand where this is going and where this is coming from."

The Obama Administration faced criticism from the right that it is trying to placate Floridians ahead of the Nov. 6 election, and The Wall Street Journal opined that Mexico is likely to retaliate with tariffs against U.S. exports as it has done previously.

Florida tomato growers have griped the pact fails to protect them against Mexican tomatoes sold in the U.S. below the cost of production, according to Reuters.