On the 1st of December prior to the final USITC report, both the Mexican government as well as the USDOC had come to an agreement and set a minimum price of $ 5.17 per 25-pound carton for imported Mexican Tomato.
In response to this agreement, the United States decided to suspend the investigation related to the antidumping of tomatoes. Initially, this deal encompassed the whole variety of Tomatoes from Mexico regardless of the season. Nevertheless, two separate price floors have been instituted in the year 1998 according to which the price of winter tomatoes could not decrease beyond $5.27/25 lb carton whereas the price of winter tomatoes could not decrease beyond $4.30/25 lb.
It is eminent to note here that the initial price did not take into account the freight and insurance cost, the difference between Florida’s price and cost as well as the transportation expenses. Hence, the agreement was canceled in the year 2002 since the majority of the Mexican tomato shippers denied to quit the agreement. As a result, the anti-dumping investigation started again.
Following these several agreements were formed that focused on the increase in prices and restoring of the antidumping investigations. Mexico offered to escalate the base cost by 18-25 for each percent, contingent upon the kind of tomato and compelled all cultivators to comply with the new cost.
Previously, just 85 for every penny of the producers needed to consent to the arrangement. An exchange war between the USA and Mexico appeared to be likely, however, another assertion was come to in March 2013, which raised the base cost by about ten percent for every pound for winter field tomatoes and establishments new value essentials for forte tomatoes and tomatoes developed in greenhouses.
On the other side, Mexico remained firmed to ensure the enforcement of the agreement. As a consequence, Mexico labeled all its domestically produced Tomatoes as “Not for Export to the USA” in order to prevent the smuggling of tomatoes into the United States and sold at prices below the baseline cost.