On Wednesday, August 22^nd, the United States and Mexico reached a draft agreement that suspends the ongoing antidumping investigation of fresh tomatoes from Mexico. The original antidumping case was filed in 1996 by Florida tomato growers, and since then suspension agreements have been in place to manage trade between the two countries and hold off the antidumping probe. In May, the Trump administration withdrew from a previous suspension agreement and placed a 17.5% tariff on Mexican tomatoes. This later increased in July when Commerce announced a 25% preliminary antidumping duty on imports of tomatoes from Mexico.

A final agreement can be signed on September 19 between the Department of Commerce and Mexican growers, as a 30-day notice period is required by statute. If this occurs, the ongoing antidumping investigation will be suspended by Commerce without issuing a final determination.

The draft agreement will establish minimum prices for certain types of tomatoes. This comes after complaints from U.S. growers over underpriced tomatoes from Mexico undercutting their produce, especially during their peak summer season. The draft agreement sets minimum prices for round and roma tomatoes at 31¢ per pound, stem-on tomatoes at 46¢, tomatoes on the vine at 50¢, specialty loose tomatoes at 49¢ and specialty packed tomatoes at 59¢. Organic tomatoes will be priced 40% higher than non-organics.

Commerce also announced new inspection requirements that will be set forth in the agreement, with these inspections eventually being conducted jointly by the USDA and CBP. Ross said the agreed-upon inspection process will be similar to the one used for imports of sugar, citrus and other Mexican agricultural products. The U.S. had concerns over imports of low-quality tomatoes that would further suppress prices. Several Mexican growers groups said in a statement that the agreement would allow for quality-control inspections on 92% of tomato exports at the U.S. border. However, Commerce said in a statement that the figure was inaccurate because it included tomatoes on the vine, which are excluded from the border inspection requirement, making the correct figure 66% of Mexican tomato imports.

Under the new deal, Commerce will also be allowed to audit up to 80 Mexican producers per quarter. The Mexican growers said importers will be entitled to reimbursement of duties that had been paid since May 7, once the deal enters into force on September 19. According to the Mexican government, there are some 1.5 million tomato growers in Mexico, and exports of the product to the United States are worth around $2 billion annually.