The United States will eliminate 17.5% tariffs on Mexican tomato, after reaching an agreement with the producers in the neighboring country on Tuesday night. In exchange for the elimination of tariffs, Mexican farmers have accepted that US border authorities inspect 92% of imports and audit 80 producers every four months. In addition, organic tomatoes will be sold at a price 40% higher than conventional tomatoes. The agreement, which will enter into force in September, closes a period of commercial uncertainty for a sector that in 2018 obtained 2,000 million dollars in exports to the northern neighbor.
The negotiations began more than a year ago, after a group of farmers in the State of Florida accused Mexican producers of unfair competition. In May the US Administration tightened the nuts. It imposed tariffs and relaunched an investigation anti-dumping, suspended for 23 years on the condition that Mexican producers sell above a pre-established price. "With the announcement … there was a serious risk for the export sector due to its impact on production and employment," says a statement from the Ministry of Economy, published on Wednesday.
In July, the US Department of Commerce estimated that the assumption dumping, as the sale is known below production costs, it was 25%, a figure that opened the doors to an even greater increase in tariffs. Initially, the United States claimed the inspection of all Mexican imports as a condition for reaching an agreement, a premise that the Mexican Government considered unacceptable.
The Executive of the Latin American country has welcomed the positive outcome of the negotiations, reached shortly before the deadline. It will be valid for five years and will be reviewed in 2024. President Andrés Manuel López Obrador celebrated Wednesday the elimination of tariffs and the Secretary of Agriculture, Víctor Villalobos, said on Twitter that the agreement "pit means keeping the market open with the United States. "
Tomato is a key agricultural product for Mexico, with a million and a half farmers dedicated to their cultivation. In addition, it is The third agricultural product that Mexico exports most to the United States, after avocado and beer. Mario Robles, director of the Confederation of Agricultural Associations of the State of Sinaloa, one of the associations involved in the talks, thanked the national and international actors that have supported the process.
On the US side, the Secretary of Commerce, Wilbur Ross, has stated that the renegotiation of the agreement is in line with President Donald Trump's priority of ensuring that "trade agreements are fair and reciprocal." It is a mantra that has dominated the trade policy of 'America first' of the current Administration, which has followed a strategy of maximizing the negotiations to achieve its objectives.
Since Trump's arrival at the White House, trade relations between the two neighboring countries have strained. Last June, the US president threatened to impose 5% tariffs on all Mexican imports if the authorities did not curb irregular immigration. In the end, that scenario, which would have been disastrous for the economy of both countries, was aborted thanks to the Mexican Government's commitment to tighten its immigration policy.
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