JOur x il' &14 -IrC t J alirrr 4; r-dI PAd *IMopirr-a A.lreruwf 2(k)


Review of Reccnl Tomato Trade Dispute
Cases

U.S. -A, .tii r Trade Dfilutwc

Trade with Mexico in fresh tomatoes has long
heen a contentious issue in the United Sule,
Mexico became a major player in the market
lullio.ing the embargo placed on Cuba in
1062 (VanSickle 1996. The removal o Cuba
from Ihr U.S. market uprncd a window ti Wop-
portunit that MNeic.Ia growers and shippers
seized. Mexico increased .hipmrcnt- of fresh
tomatoes to the Unilcd States and eroded Flor-
ida's market share to the point where Florlda.
producers filed their first antidumping peititon
in 1978." That petition was withdrawn at the
urging of the Carter AdmrinitraI'in but was
reubhmiriid the I1oluowint year when increased
imports continued to depress returns to Florida
growu er'r "The US. Department of Commerce
did not idcntl dniiipin in that case when it
used the third country test as the measure of
lair market value <i.e omniparing sales in the
L'niicJ Slatts to sales of Mexican Irhh to-
mtraoes in Canli.d.i) NowIhii hLtiidiling the out-
clme ol that decision, MNeccJo did ,hift tus pol-
icy reg:ardin priduLce sports. niuagini their
trade over the decade L! the I18O, and in the
early 1990s by imposing minimum quality
standards that had the effect of controlling the
volume of produce they shipped to I i S and
Canadian markets (VjnSickle 1' 9. 1,3). Al-
though short peri(_.b of depressed markets oc-
curred over dl-,i period, the intensity of cor-
petiiion was much less than it had been
iJord.an and V.inSicklh It)95h)
 The North American Frve Trade Agree-
ment NAFTA)14 ushered in a new era for the

 SCertain Fresh Winter Fresh reihable. f. ~
Mexico: Termnination oi Ainiidumping ine,~iig.ngiinm 44
Fed. Reg, -.13,+7 1979),
 'Ceitain Fresh Winter Fresh t gie'uabhl from
Mexico: \nidJuinping Pr.i'ecdling. NiaiL and Tentaiive
tDeterni.ion of s.ile at Not ltei Than Fair Nalu.:.
44 Fed. Rtg 63S88 1979).
 Certain Fresh Winter Frsh Vegelables f~i
Mexico: F-rnal .Deirminaicmn of Sales at Not Less I ihin
Fair Market Value 45 Fed. Rit 20.5r1 (1980).
 SNorth AC eroicin Free Trade A32inueni. DeC. 17,I
1992. Can -MC.-US,, 32 i.L.M.289.


produce industry and brought with it more
trade disputes that were Laken to the ITC and
DOC. The three main provisions ,l NAITA
rel.l iiiig to tomatoes were (1) elimination of
tariffs over a I n--car transition period, (2) lib-
erai/ition of te ransportation secor, and (3)
removal ot barriers to investment. Of these.
thc investment provisions of NAFTA and pol-
icy change in Mexico concerning land reform
and investment have had the greareil effect on
Mexico's Lomprtiltr c advantage. U.S. growk err
have long held an I'adlantage in the U.S. mar-
ket for fresh produce because of their prox-
imity to the market and because of the rapid
deelnp.rieni and adoption of new technolo-
gies. Investment provisions in NAFTA have
Licrin f'rtreii investors more -eculii and re-
atilled in 'slgnilitan investment in Lhc .Mexican
produce industry.' This investment brought
with it newer leidnologic- that once were the
domain iof the li.S. induilry and diminished
the advantage U.S. gn'mwer held in technolo-
Pg. This dinmiii'hel .dlxa~ltage was argued by
Mexico to be one of the main reasons ftr their
increased presence in the U.S market.
 A greater effect on the competitive advan-
tage occurred because o' the large peso de-
valuation beginning in December 199'-
(V'aiiSidi ILJ 3). Prior to N A\FTA, Mexico
macroeconomic policies had lu wr-ed inilaiion
in Mexico and lbroulght reliatv c s stability to the
Mexican peso. The peso became overvalued
in the early 199tIW because policy makers in
Mexico controlled the rate of devaluation. The
peso was allowed to irto.u beginning in De-
cember 1994 and was devalued from 34 new
pesos to the U.S. dollar to 6.7 new pesos to
the U.S. di llar in March 1995, a devaluation
of almost 501; This led to a ,urge in U S
imnpori- ol Mexican tomatoes and depressed
prices that related in a petition that was filed
March 1995 with the ITC seeking relief from
increased imports of Ireh"l tomatoes under
Section 2- I of the Trade Act of 1974.. '~ A See-
tion 201 petition allows .ro~wers to seek relief


 s" NL-'VT upr note 14 pL. 3. ch. It (Invmet-
ment).
 SFresth Winter Tomatoe, 6 Fed. Reg. 16.W3
(IIJY9l : s .- 19 UI.SC. ~2i? ,lldi WlL-1' ,