Background on the Situation
The European Union (EU) is considering imposing a 20.91% tariff on Mexican tomatoes, which could be announced by July 14 if the suspension agreement allowing exports since 2019 is not renewed. The U.S. Department of Commerce announced its intention to cancel the agreement on April 15.
Potential Impacts
- Scenario 1: A possible reduction of up to 25% could lead to a sharp drop in farm prices, putting over 100,000 direct and indirect jobs at risk in Mexico.
- Scenario 2: A partial negotiation could maintain some preferential conditions, like specific quotas or temporary bilateral agreements. This would partially mitigate the economic impact but increase logistical and operational costs.
- Scenario 3: Renewing the agreement before its expiration ensures trade continuity and certainty for producers and buyers, maintaining Mexican tomatoes’ competitiveness in the U.S., their primary market.
GCMA’s Perspective
Juan Carlos Anaya, General Director of the Grupo de Consultores de Mercados Agrícolas (GCMA), urged “urgent bilateral dialogue based on the commitments made in the T-MEC” to renew the suspension agreement before July 14.
Anaya emphasized that the proposed tariff would distort bilateral trade rules and violate T-MEC’s openness and cooperation principles, as well as the World Trade Organization (WTO) framework. He highlighted that such protective measures weaken legal certainty for producers, exporters, and consumers in both countries.
Anaya also pointed out that tomatoes are a perishable, essential commodity supplying millions of U.S. households. An interrupted trade would affect not only Mexican producers but also U.S. importers, retailers, and consumers, potentially increasing prices and reducing availability.
Mexican Tomato Production
Mexico’s national red tomato production is projected to reach 3.65 million metric tons by the end of 2025, a 1.1% increase from 2024. This growth is attributed to technological advancements, particularly in greenhouse cultivation.
Anaya stressed the importance of preserving free trade for tomatoes, not just for the sector but as a shared economic, social, and geostrategic interest for North America.
Key Questions and Answers
- What is the issue? The EU is considering imposing a 20.91% tariff on Mexican tomatoes, which could disrupt trade and violate T-MEC and WTO principles.
- What are the potential impacts? Possible reductions could lead to lower farm prices and job losses, while partial negotiations might increase costs. Renewing the agreement would maintain competitiveness in the U.S. market.
- Why is this important? Tomatoes are a crucial, perishable commodity for U.S. households, and interrupted trade would affect producers, importers, retailers, and consumers in both countries.
- What is Mexico’s stance? GCMA’s Juan Carlos Anaya calls for bilateral dialogue based on T-MEC commitments to renew the suspension agreement before July 14, emphasizing the importance of free trade for North American interests.
