The close trading relationship we have with Mexico is the bedrock of a healthy, prosperous North American economy. As a congressman who represents South Texas, I am committed to ensuring that we maintain this crucial relationship and protect good paying jobs that our communities along the Texas-Mexico border depend on.
Unfortunately, there is an immediate threat to our local economies.
On June 16, 2023, the Florida Tomato Exchange petitioned the U.S. Department of Commerce to terminate the Tomato Suspension Agreement (TSA), a long-standing trade agreement governing imports of fresh tomatoes from Mexico.
Mexican tomatoes play a vital role in the U.S. fresh tomato market. Their availability and affordability help keep prices low for consumers, and they also offer the variety, quality, and taste that American consumers demand. Terminating the TSA, which sets a fixed price for the sale of imported tomatoes from Mexico, would impose a new 21 percent ‘tomato tax’ on these essential staples that feed so many American families.
The importation, distribution and processing of Mexican tomatoes are an important economic engine for the Southwest Border region. The industry directly supports thousands of jobs in transportation, warehousing, wholesale distribution, and retail sales. Additionally, it indirectly contributes to employment in packaging, marketing, and logistics services. A recent analysis conducted by economists with Texas A&M University confirmed that, on a national scale, fresh tomatoes imported from Mexico in 2022 added $7.54 billion to the U.S. economy and supported 49,128 American jobs. The tomato tax would put our economy and our workers at significant risk.
The State of Texas would feel that negative impact more acutely than any other as trade accounts for 15.7 percent of our GDP. For decades, the Tomato Suspension Agreement has been a cornerstone of economic stability for countless Texas companies in the fresh produce supply chain. If the Department of Commerce terminates the agreement, many of these jobs would be eliminated. According to an analysis by economists at Arizona State University, Texas stands to lose $4.53 billion in economic activity and more than 32,000 jobs if the agreement is terminated and Mexican tomato imports are removed from the U.S. market. In addition, based on the lost tomato sales, Texas would levy $112.9 million less in state taxes, and counties in Texas would earn $24.6 million less in revenue, meaning less money for schools, roads, and local law enforcement and fire departments, among other vital services.
Furthermore, according to the same ASU study, resulting tariffs on imports would substantially reduce the supply of fresh tomatoes in the United States, leading to fewer choices and an average price increase of 52 percent nationwide.
At a time where the Biden Administration is working hard to lower costs and improve their standing in Americans’ perceptions of the economy, we cannot afford to terminate the Tomato Suspension Agreement.
The Florida growers argue that Mexican growers are violating the agreement by selling their tomatoes in the United States at too low of a price. However, the U.S Department of Commerce and the U.S. Department of Agriculture have not found Mexico to be in violation. The truth of the matter is that American consumers prefer vine-ripened tomatoes from Mexico over the taste of Florida grown tomatoes, which are picked while green and processed to artificially turn them pink.
Moreover, there’s also a danger to imposing protectionist measures based on the FTE’s unsubstantiated claims that could prompt Mexico to retaliate by levying tariffs on U.S. exports, adversely affecting farmers in Texas and nationwide, and needlessly damaging our relationship with a key trade partner and ally.
The U.S. Department of Commerce shouldn’t allow the self-interest of a handful of Florida growers to wreak havoc on the Texas economy and the broader U.S. economy. As the Biden Administration weighs this petition by the FTE, it must consider the significant harm that would be inflicted on U.S. businesses, their workers, and thousands of American families should this agreement be terminated.
Editor’s Note: The above guest column was penned by U.S. Rep. Vicente Gonzalez of McAllen, Texas. The column appears in The Rio Grande Guardian International News Service with the permission of the author. Gonzalez can be reached by email via: Mauricio.Armaza@mail.house.gov.
