U.S., Mexico Agree to End Tomato Fight

The U.S. Commerce Department said Friday that it reached a tentative agreement with Mexican tomato growers to squash a bitter trade dispute.

The proposed agreement will settle a controversial complaint brought by Florida tomato growers against Mexican growers that alleged the Mexicans sold their produce in the United States at below-market prices and cost the domestic industry hundreds of millions of dollars in lost sales.

The tomato fight had threatened to explode into a potentially ugly and messy trade war between the two neighbors, threatening commerce in a large variety of high-volume, high-priced products.

The dispute also stirred up charges that Florida growers have been seeking undue protection in an election year and that because of Florida’s 25 electoral votes, the Clinton administration has looked more sympathetically at the U.S. industry’s complaint.

Under the proposed settlement, which was signed late Thursday by U.S. officials and Mexican growers, the Mexicans would agree not to sell their produce in the United States at less than a so-called reference price of 20.68 cents per pound, or about $5.17 per 25-pound box.

Last winter, wholesale tomato prices dropped to $3 per box and even lower because of increased supplies and competition. The new minimum price can be adjusted after one year if market conditions change significantly.

Florida tomato growers hailed the agreement, which they said would establish a fair market and help get the industry back on its feet. They said it would not increase tomato prices for consumers, but rather should result in a more stable market and more stable prices.

“We’re very happy about this. This is something that works for both sides,” said Ray Gilmer of the Florida Fruit & Vegetable Assn.

“This pact helps ensure . . . competitive pricing for consumers,” said Mike Stuart of the Florida group.

Commerce Secretary Mickey Kantor said the agreement “will provide strong relief to tomato growers in Florida and other states and help preserve jobs in the industry.”

Agriculture Department Secretary Dan Glickman said he was pleased with the agreement and said it showed that U.S. trade laws can protect U.S. industries from unfair competition “without unduly restricting trade and adversely impacting consumers.”

Under the five-year agreement, which becomes official Oct. 25, the U.S. government would implement a monitoring system for Mexican imports. The administration can terminate the pact at any time if it finds the terms have been violated.