Florida Farmers Lose Ruling on Imports

Rejecting a complaint from Florida growers, the U.S. International Trade Commission ruled Tuesday that a surge in Mexican imports is not causing substantial harm to domestic growers of winter tomatoes and bell peppers.

The commission’s 4-1 vote denied relief sought by the Florida Department of Agriculture and groups representing vegetable growers there. In its petition in March, the department complained that farmers in Florida and other states were being hurt by increased imports from Mexico that caused losses of about $1 billion annually.

ITC Chairman David Rohr and the majority concluded that the Mexican imports were “not a substantial cause . . . or threat of serious injury” to the domestic industry. The commission did not elaborate on its findings.

California tomato farmers had no direct stake in the dispute because they produce most of their crop in the summer, when Mexico’s weather is too hot. But as the first such case under the North American Free Trade Agreement, the decision against domestic growers was seen as a worrisome sign.

“It is unfortunate the ITC has ruled against domestic vegetable growers,” California Farm Bureau Federation President Bob L. Vice said in a statement. “It is a serious setback to the principles of fair trade.”

But Mexican growers and some consumer advocates hailed the decision.

“We’ve just avoided a doubling of tomato prices” for American consumers, from the current $1.50 a pound, according to Lee Frankel, president of the Fresh Produce Assn. of the Americas of Nogales, Ariz., which represents 40 importers.

Luis Cardenas Fonseca, president of the Confederation of Agricultural Assns. of the Mexican state of Sinaloa, said that Mexican producers had feared that U.S. political pressures would produce a different outcome.

“For us, it is very gratifying that the International Trade Commission exercised its independence from politics and made a decision based on the facts,” he said.

Florida is the largest producer of winter fresh tomatoes. Florida agriculture officials said that Mexican competition, spurred by the North American Free Trade Agreement, was partly to blame for the decline of their industry from $750 million in 1992 to about half that today. If the decline continues, American consumers will be the losers, they said.

But Mexican growers and independent U.S. economists have blamed the cheaper peso and Mexico’s lower production costs, rather than illegal trade practices, for making Mexican tomatoes so inexpensive.

U.S. Department of Agriculture figures show that Florida’s production costs range from $7.06 to $8.25 for a 25-pound box, whereas Mexico’s costs are about $5 to $6, and the peso devaluation reduced Mexican costs by about another dollar.

Although Tuesday’s ruling ends the import-surge dispute, a second case that involves alleged dumping of Mexican tomatoes at below-market prices is still pending at the Commerce Department, which must make a preliminary ruling by Sept. 9.

If the department determines that Mexican tomatoes are being sold at unfair prices, it has the power to set dumping duties or border taxes on tomatoes and bell peppers that would raise prices to a level considered fair to U.S. farmers.

* Times staff writers Mary Beth Sheridan in Mexico City and Martha Groves in Los Angeles contributed to this report.