The Tomato Suspension Agreement (TSA) is a trade agreement that has been in place between the governments of the United States and Mexico since 1996. It has been designed to regulate the import of tomatoes from Mexico into the US and avoid any potential trade disputes.
In 2019, the US Commerce Department began renegotiating the TSA with Mexican tomato growers and exporters. The negotiations were aimed at updating the agreement to address concerns raised by American tomato growers. The primary concern was that Mexican tomatoes were being sold at prices below the cost of production in the US, leading to unfair competition and lost jobs for American workers.
After several rounds of negotiations, a new agreement was reached in September 2019. The updated agreement, called the Tomato Suspension Agreement 2020, includes several key changes to the previous version.
One of the most significant changes is the establishment of a minimum reference price for Mexican tomatoes. This price is calculated based on the cost of production in Mexico, including reasonable profit levels. The minimum price is intended to ensure that Mexican tomatoes are not sold in the US at prices that are lower than what American growers can produce them for.
Another important change is the inclusion of a provision that allows the US government to investigate claims of dumping by Mexican tomato exporters. Dumping occurs when a foreign company sells goods in another country at prices that are lower than the cost of production, which can unfairly undercut domestic producers. Under the new TSA, the US government will have the power to investigate and impose duties on Mexican tomatoes deemed to be dumped in the US market.
The Tomato Suspension Agreement 2020 has been welcomed by both American and Mexican tomato growers and exporters, as well as by US government officials. The agreement aims to level the playing field for American tomato growers while also ensuring a stable and predictable market for Mexican exporters.
For consumers, the TSA will help maintain a steady supply of high-quality tomatoes from Mexico while also supporting American jobs and the economy. The agreement is set to remain in effect until 2024, at which point it will be renegotiated again to reflect any changes in the market and trade conditions.