Florida tomato growers want U.S. trade decision before election

WASHINGTON Tue Sep 11, 2012 6:23pm EDT

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WASHINGTON (Reuters) - Florida tomato growers want the Obama administration to approve their request to terminate a 16-year-old tomato trade pact with Mexico before the November 6 presidential election, a lawyer for the group said on Tuesday.

Florida growers complain the current agreement is outdated and fails to protect them against Mexican tomatoes sold in the United States well below the cost of production.

The pact is known as a "suspension agreement" because the Commerce Department suspended anti-dumping proceedings in 1996 and negotiated a deal that governs the price at which Mexican tomatoes can be sold in the United States.

Some supporters of the pact said the Florida Tomato Exchange's case was timed to maximize political pressure on Democratic President Barack Obama, who is facing a tough re-election battle. But Terry Stewart, head of the Stewart and Stewart law firm, which is representing the Florida Tomato Exchange, denied those charges.

"This is only an election issue because the Mexicans have put such enormous pressure on the Commerce Department and the government overall" to keep the agreement, Stewart said.

Florida is one of several battleground states expected to determine the outcome of the presidential election pitting Obama against Republican challenger Mitt Romney.

The Commerce Department could have terminated the pact in July, as the Florida Tomato Exchange requested, Stewart said.

Instead, the department decided after meeting with Mexican officials in August to review the agreement and to make a preliminary decision on any action "as soon as practicable." Commerce Department officials have refused to say when a preliminary decision will be made.

Stewart said he thinks Florida growers are entitled to a decision within 45 days or by early October. Supporters of the current agreement argue a 270-day review is warranted.

U.S. imports of Mexican tomatoes have nearly tripled in value since the 1996 pact and totaled about $1.8 billion last year, the Florida growers said.

Voiding the agreement would pave the way for the Florida group to bring a new anti-dumping case against Mexico based on more recent price and cost-of-production data, but Stewart insisted there has been no final decision on that.

At a meeting in Washington on August 16, Mexican Under Secretary for Foreign Trade Francisco de Rosenzweig urged senior Commerce Department officials not to terminate the pact.

"Tomatoes are the most important agricultural export from Mexico to the United States and are crucial to the Mexican economy," the Mexican government said in follow-up comments filed last week with the Commerce Department.

"Termination of the suspension agreement would not only harm the Mexican agricultural sector, but would also affect U.S. consumers, who would pay higher prices, have less variety of products, and suffer from scarcity because U.S. producers have insufficient capacity to satisfy U.S. demand," Mexico said.

Mexico producers and importers in Arizona are battling to keep the pact and accuse the Florida group of failing to show that 85 percent of the U.S. industry supports its request.

"As a result, the department's initiation of this changed circumstances review was unlawful," attorneys with the firm Shearman & Sterling, who represent the Mexican tomato industry, said in comments filed with the Commerce Department.

Florida growers "have timed their request for the middle of presidential election in the hopes of guaranteeing the department's support and help in their efforts. The department must not give into this request," the law firm added.

Stewart said the Florida group has shown support from around 90 percent of U.S. industry and was "dumbfounded" the Commerce Department did not immediately terminate the pact.

(Reporting By Doug Palmer; Editing by Stacey Joyce)

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