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What Does the Obama Administration Have Against Cheap Vegetables?

Posted By Bryan Riley On October 1, 2012 @ 5:44 pm In Featured | Comments Disabled

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The Obama Administration’s Commerce Department recently took a preliminary position in favor [2] of ending a 16-year-old trade agreement governing tomatoes imported from Mexico.

The Florida Tomato Exchange asked the Administration to end the agreement because it doesn’t want to compete with low-priced tomatoes grown in Mexico. This announcement took Mexico by surprise, and both advocates and opponents of the agreement are up in arms [3].

It isn’t just the Administration that has stepped into this fray. In Florida, 17 politicians [4] have aligned themselves with the Florida Tomato Exchange and against Americans who like to eat tomatoes.

The dispute dates back the North American Free Trade Agreement [5] (NAFTA), which removed tariffs on Mexican tomatoes—but not for long. When American consumers started buying more Mexican tomatoes, U.S. tomato producers filed complaints that their Mexican competitors were “dumping” tomatoes on the American market. The resulting 1996 agreement set a minimum price at which Mexican producers could sell tomatoes in the U.S.

This interference in the market was accepted by Mexican producers as a better alternative to the possibility of protectionist anti-dumping duties being imposed on their tomatoes by U.S. bureaucrats. However, U.S. tomato growers now think that the price dictated by the current agreement, renewed in 2008 [6], is too low.

Half of all tomatoes consumed in the U.S. come from Mexico. New tariffs would penalize U.S. consumers, and Mexico would almost surely retaliate [7] by imposing duties on competitive U.S. exports.

It’s time to get the government out of the tomato dispute altogether. If the existing pact is going to be abolished, it should be in favor of completely free trade, not greater protectionism that raises prices. The U.S. government needs to guarantee consumers the freedom to spend their money on tomatoes from Florida, Mexico, or anywhere else without interference. Anything else would simply be rotten trade policy.

Mark Lamborn is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit http://www.heritage.org/about/departments/ylp.cfm [8].


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/10/01/what-does-the-obama-administration-have-against-cheap-vegetables/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/tomatoes.jpg

[2] preliminary position in favor: http://www.reuters.com/article/2012/09/27/usa-mexico-trade-idUSL1E8KR9WT20120927

[3] up in arms: http://www.nytimes.com/2012/09/28/business/global/tomatoes-are-ammunition-for-a-trade-war-between-us-and-mexico.html?pagewanted=1&_r=2

[4] 17 politicians: http://www.reuters.com/article/2012/09/19/us-usa-mexico-tomatoes-idUSBRE88I02T20120919

[5] North American Free Trade Agreement: http://www.heritage.org/research/reports/2001/08/the-effects-of-nafta-on-exports-jobs

[6] renewed in 2008: http://ia.ita.doc.gov/tomato/2008-agreement/2008-agreement.html

[7] retaliate: http://www.bloomberg.com/news/2012-09-27/u-s-ends-mexican-tomato-price-accord-raising-risk-of-trade-war.html

[8] http://www.heritage.org/about/departments/ylp.cfm: http://www.heritage.org/about/departments/ylp.cfm

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