February 3, 2013 4:16 am

Tomato deal averts US-Mexico trade spat

The US and Mexico have reached a deal to avert a trade dispute over tomatoes that had threatened to jeopardise economic relations between the North American neighbours.

Late on Saturday, the US commerce department announced that it had struck an agreement with Mexico resetting the terms of tomato imports to the US.

Last year,Washington had sided with Florida growers by backing away from a 1996 deal that kept Mexican tomato prices low in US supermarket – causing anger in Mexico.

“I am pleased that we were able to come to an agreement on fresh tomato imports from Mexico that restores stability and confidence to the US tomato market and meets the requirements of US law,” Francisco Sánchez, a senior US commerce department official, said in a statement.

“The draft agreement raises reference prices substantially – in some cases more than double the current reference price for certain products – and accounts for changes that have occurred in the tomato market since the signing of the original agreement, “ he added.

Last September’s decision had angered Mexican tomato growers, and prompted Mexican officials to accuse President Barack Obama of pandering to Florida farmers in order to garner their support in a critical swing state in the final months of his re-election campaign.

The tomato fight was on track to be the worst trade dispute between the North American Free Trade Agreement members since the resolution of a battle over cross-border trucking regulations.

Tomato exports to the US have been growing, reaching $1.8bn in 2011 and more than $1bn in first six months of last year.

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