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National Restaurant Association - U.S.-Mexico talks on tomato prices continue

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U.S.-Mexico talks on tomato prices continue

The United States and Mexico are still in talks to renegotiate a trade agreement that would allow Mexico to continue exporting its tomatoes despite a national effort by U.S. growers to end that contract.

According to the U.S. growers, the U.S. Department of Commerce's deal with Mexican farmers has, since 1996, kept the price of tomatoes so low it's become nearly impossible for the United States to compete with Mexico.

U.S. growers already rejected a deal, brokered by Mexican growers and the Commerce Department that would have increased the amount at which they could sell a pound of tomatoes in the United States to as much as 25 percent.

Given the rejection of the deal offering a 25-percent increase in price, there is concern that an ultimate agreement could result in a spike of 30 percent to 40 percent in the cost of tomatoes. This, of course, would impact restaurant operators and their customers, the National Restaurant Association has asserted. Furthermore, the Association stated, a lack of resolution on the issue - regardless of the outcome - would create market instability in the supply chain as well as uncertainty among operators.

"As major consumers of both domestic and Mexican tomatoes, the industry is concerned that the termination of the existing trade agreement will lead to volatility in tomato prices for restaurant and foodservice operators and their customers," said Scott DeFife, the NRA's executive vice president of policy and government affairs. "Unpredictable, and possibly higher, tomato prices could negatively impact industry operations and American jobs to the detriment of the public interest."

Restaurant and foodservice operations account for roughly 34 percent of tomato consumption in the United States, and are responsible for purchasing an estimated 1 billion pounds of tomatoes annually.

DeFife said the NRA remains hopeful the trade agreement will either be kept in place or renegotiated to address the concerns of both domestic and Mexican tomato growers.

Commerce is expected to decide whether to terminate its 16-year-old contract with Mexico by May 13, 2013.

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