The U.S. International Trade Commission (ITC) on Friday, November 22nd, voted 4-0, making an affirmative determination that dumped tomatoes from Mexico threaten to injure the American tomato industry. As a result, the recently finalized agreement – negotiated by the Department of Commerce – suspending the antidumping duty (AD) investigation of fresh tomatoes from Mexico will remain in place.
Secretary of Commerce Wilbur Ross said: “This action cements the strong suspension agreement that Commerce recently negotiated that protects the U.S. tomato industry from the damaging effects of unfair trade and provides certainty for the market.”
On September 19, 2019, Commerce and Mexican tomato growers finalized the 2019 Suspension Agreement, which contains robust enforcement provisions completely eliminating the injurious effects of unfairly priced Mexican tomatoes, preventing price suppression and undercutting, as well as eliminating substantially all dumping. This agreement also closes loopholes from past deals that permitted sales below the reference prices, while including an inspection mechanism to prevent the importation of low-quality, poor-condition tomatoes from Mexico and allowing Commerce to audit up to 80 Mexican tomato producers and U.S. sellers per quarter, or more with good cause.
On October 11 and 15, 2019, domestic tomato producers exercised their option under the AD law to request that Commerce and the ITC continue their previously suspended investigations on fresh tomatoes from Mexico. Accordingly, the Department completed its AD investigation, finding that Mexican tomatoes are dumped in the United States, while the ITC’s affirmative vote addresses injury to the domestic industry. Together, these determinations allow the 2019 Suspension Agreement to remain in force, in lieu of AD duties.
Section 734(f)(3) of the Tariff Act of 1930 states that, if Commerce and the ITC reach affirmative determinations after a suspension agreement is successfully negotiated, then Commerce will not issue an antidumping duty order as long as the suspension agreement remains in force, the agreement continues to meet the applicable statutory requirements, and the relevant parties carry out their obligations in accordance with the agreement’s terms.
A consortium of the largest Mexican tomato growers issued the following statement regarding the U.S. International Trade Commission's investigation:
The Mexican tomato growers are disappointed with the outcome of the U.S. International Trade Commission's investigation into whether Mexican imports of tomatoes have injured the U.S. industry and have separately challenged the Commerce Department finding of dumping at the U.S. Court of International Trade. "Our calculations based on the very computer programs used by the Commerce Department demonstrate that we are not dumping. We look forward to having the court review Commerce's calculations," said Rosario Beltran, president of the Sinaloa growers association.
In the meantime, the Mexican growers remain committed to the terms of the agreement signed in September. Extensive implementation efforts across Mexico began months ago and will intensify as the industry ramps up for the winter season. "The grower associations in Mexico are working closely with their membership to make sure all the terms of the agreement are understood and there is full compliance," said Guillermo Jimenez, President of Mexico's largest growers association, AMHPAC. "We have done bulletins, workshops and webcasts to reach every grower."
"As we said in September, we are happy with the agreement we signed and look forward to working with the Commerce Department on implementation and enforcement," said Salvador Garcia, president of the association of Baja growers. Antonio Gandara, President of the Sonora growers association, added: "We take the Department of Commerce at its word that the agreement is not designed to impede trade and will be an enduring document. We look forward to continue supplying the best tomatoes in the world to U.S. consumers."