US groups fear big price hikes, trade war over Mexican tomatoes

Mexican officials have already raised the threat of retaliation if Mexico's tomato exports to the United States, valued at nearly $2 billion a year, are damaged by the trade dispute and failure to extend the tomato agreement.

'SMACKING OF EXTORTION'

Their warning was echoed on Thursday by Patrick Kilbride, a senior US Chamber of Commerce official, who joined Jungmeyer on the conference call in they which both spoke to reporters.

"In any trade relationship, and especially in one as broad and deep as the US-Mexico relationship, there's going to be a number of areas at any given time where there are disputes," Kilbride said.

"In a number of areas on both sides of the border you're going to have situations where one country or the other could as a legal matter impose some sort of legal restriction," Kilbride added.

"If we go down that path, it really works to the detriment of producers and consumers in both countries," he said. "Our simple point is that this relationship is far too important to let that happen and we want to see both governments working together to create the mechanisms that will defuse these sort of disputes before they come to this point."

Reggie Brown, who heads the Florida Tomato Exchange, said warnings about price hikes and retaliatory measures over the possible termination of the US-Mexico tomato agreement were nothing but "scare tactics" and a "red herring."

"The only reason the price of tomatoes may change in the marketplace would be if in fact the Mexicans have been dumping the product into the US market and they self-correct themselves to get prices that are not actionable under US trade law," he said.

"Why would it ignite a trade war with the Mexican industry simply because there are laws that regulate trade disputes?" Brown asked.

... contd.

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