U.S. ruling raises fear of tomato trade war
Reporter: Craig Smith
NOGALES, Ariz (KGUN9-TV) - Florida growers accuse Mexico of flooding with market with cheap tomatoes and they want something done about it; But what they want could cost you more at the checkout line and cost jobs on the border.
At the heart of this food fight is a 16 year old trade agreement aimed at keeping things fair. Since the agreement was made a lot has changed.
It costs U.S. growers more---and their profits are less.
In Mexico low wages combined with government subsidies are turning tomatoes into a cash crop---one that benefits workers on both sides of the border.
At JC Distributing the season's first tomatoes are just coming in. In a few weeks the warehouse will be stacked floor to ceiling with ripe red tomatoes on their way to restaurants, grocery stores and maybe your dinner plate.
But Florida Tomato growers complain Mexican farmers are unfair competition selling tomatoes for less than it costs to grow them.
There is a pricing agreement designed to keep Mexican tomatoes from undercutting US tomatoes but Florida convinced the Federal Commerce Department to make a preliminary ruling that throws out that agreement. That could let Florida farmers push for tougher price restrictions on Mexican tomatoes.
Jaime Chamberlain of JC Distributing says that would hurt Nogales huge packing house industry and its workers
"Because if we're not able to bring our tomatoes through here which is our largest commodity we're going to be forced to reduce our staff."
The tons of tomatoes that pass through the Port of Nogales are so important to the Mexican economy, the worry is that if the United States dispute slaps import fees on those Mexican tomatoes to jack up the prices Mexico will retaliate and jack up tariffs on U.S. products headed south. Then you have a classic trade war that could affect other food prices too.
Jaime Chamberlain says, "You have big, big associations like the National restaurant Association that is watching this and has sent letters on our behalf as well as WalMart and some of the other chain stores in the United States."
Politics enters the picture here. Arizona interests think the Obama administration is siding with Florida because Florida is a key swing state and winning Florida could help win the election.
Because the decision is still tentative, representatives from Arizona, Florida and Mexico are in Washington D.C. right now lobbying hard on this issue.