U.S.

-Mexican Tomato
Dispute
Because NAFTA abolished U.S. tariffs on Mexican products, the competition
intensified.

U.S. tomato growers accused Mexican growers of dumping--selling tomatoes

in the United States for less than fair value--and driving out U.S. producers.

Mexican tomatoes were the object of an antidumping petition from The

Mexican government stating that because of superior equipment, favorable
weather, and reduced labor costs, Mexican tomatoes are not marketed below
fair value, and are thus more competitive.
 U.S.-Mexican Tomato
Dispute
In 1996, the agreement was made in which Mexico's largest growers placed a
price floor of tomatoes sold in the U.S.

• Summer - $0.17/lb.
• Winter - $0.21 / lb.

This resulted in Mexico exporting more tomatoes to other countries, which

increased sales in the U.S. and lessen the restrictive effect of a Mexican price
floor.

In 2012-13, U.S. growers lobbied for the termination of price floor agreement,
saying they could not compete at those low prices
 U.S.-Mexican Tomato
In 2013, U.S. & Mexico reachedDispute
a new agreement, setting new minimum sale
price

• Summer - $0.246/lb.
• Winter - $0.31 / lb.

The agreement also extended the pact to include all Mexican growers &
exporters and all types of tomatoes.

Mexican growers are not pleased with the price floor raise but recognized that
the agreement restored stability to the American tomato market and therefore
avoided more costly trade war
 Is NAFTA an Optimum Currency
Factors in favor
Area? Factors opposed

• Degree of economic integration of • Mexico couldn’t use monetary policy in

Canada, U.S., and Mexico case of economic downturn
• Similarity of economic structures • Canada concerned about potential loss of
between Canada and U.S. national sovereignty