Tentative tomato truce should avoid tomato trade war
Photo: Video by kgun9.com
Reporter: Craig Smith
NOGALES, Ariz (KGUN9-TV) - The tomatoes on your salad plate could have become the weapons in a trade war that could have cost a lot of jobs in Southern Arizona.
Now there's hope for a truce but it could still cost Nogales some jobs and you some money at the grocery store.
Mexican tomatoes are the biggest single product crossing the border into Nogales. But a complaint from US growers has been threatening to squeeze, or even squash a big slice of business for Southern Arizona.
Tomatoes from Mexico are very big business in Southern Arizona-according to the Fresh Produce Association of the Americas they're worth about a billion dollars, and they're the main product of a produce business that supports about 12 thousand jobs.
But US growers say Mexican growers have been unfair competition, dumping tomatoes in the US for less than it costs to grow them. They wanted the US to kill a trade agreement that allowed Mexican tomatoes to sell here.
That led leaders in packing industry like Jaime Chamberlain of J-C Distributing to fear Mexico would retaliate by charging high fees to sell US goods in Mexico---a classic, business-killing trade war.
Now Mexican growers have tentatively agreed to higher prices. That should head off a trade war, but Jaime Chamberlain thinks the higher prices will still suppress business for Southern Arizona.
KGUN9 reporter Craig Smith asked Jaime Chamberlain: "Is this a choice between a small negative on the job front vs. a trade war that would have been disastrous?
Chamberlain: "The whole time we've been talking about the suspension agreement we've said that a trade war would be negative and disastrous for both sides."
The Fresh Produce Association of the Americas, the association that represents Nogales packing houses thinks Mexican growers are giving away too much in the agreement. The Mexican government and the U.S. Commerce Department are still working out the exact terms.
U.S. growers like Certified Greenhouse Farmers, the association for greenhouse tomato growers, are happy with what they have so far, but what will this mean when you shop for tomatoes?
Association Presdietn Edward Beckman says of the grocery store impact: "…Probably not much of anything because the bottom line is retail pricing is really dictated by what retail margins are going to be. The only increase we're going to see which is maybe ten, maybe twenty cents a pound at the most, I don't really expect that's going to be passed onto the consumer at all."
Because the agreement sets a minimum price on Mexican tomatoes Jaime Chamberlain does expect retail prices to rise but he can't predict how much.
The deal is still officially tentative.
It's due to be final early next month.