Jim Whitney Economics 311
 
Trade dispute case study: Fresh tomatoes from Mexico
International Trade Commission case: TA-201-66 (1996)

Complaint: According to the Florida Fruit & Vegetable Association, and others, fresh tomatoes are being imported into the United States from Mexico in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industries producing articles like or directly competitive with the imported articles.

Background:
    --Following the implementation of NAFTA in January 1994, the U.S. began a process of eliminating its import restrictions on agricultural products from Mexico.
    --No assertion of any unfair trading practices is made in this complaint.

Import information:
    --The ratio of imports of fresh tomatoes to U.S. production of fresh tomatoes (in quantity) rose irregularly from 23.5 percent in 1991 to 41.7 percent in 1995.
    --Mexico accounted for over 95 percent by volume of U.S. imports of fresh tomatoes in 1995.

Domestic industry information:
    Procedure: The International Trade Commission sent questionnaires to 666 growers of tomatoes and/or bell peppers and received usable data from 163 growers representing an estimated 57 percent of 1995 U.S. harvested production of fresh tomatoes. The Commission also utilized USDA data when such data were available.
    Prices: For mature green tomatoes, 85 percent U.S. #1 or better, large size, questionnaire respondents reported net free on board. selling prices of $0.35 per pound in January 1993, $0.47 per pound in January 1994, $0.40 per pound in January 1995, and $0.19 per pound in January 1996. The quantity of tomatoes sold by the reporting firms in January 1996, when prices were the lowest of the four January months, was significantly higher than in any of the three previous January months. The reverse was true for the same product for February of each of the same four years. Questionnaire respondents reported per pound selling prices of $0.21, $0.20, $0.29, and $0.30 for February 1993, 1994, 1995, and 1996; February 1996 sales were the lowest of the four February months.
    Production: According to USDA statistics, production totaled 3.4 billion pounds in 1991, rose to 3.9 billion pounds in 1992, then fell to 3.6 billion pounds in 1993, rose to 3.7 billion pounds in 1994, and then fell again to 3.3 billion pounds in 1995. Shipment data furnished by domestic growers in response to Commission questionnaires, which are less comprehensive than USDA official production statistics, show a significant increase in U.S. grower shipments during the period 1991-95, from 1.2 billion pounds to 1.6 billion pounds, or 30 percent.
    Profits: The data show that a significant number of growers operated at a loss throughout the period. The data also show that domestic sales (in quantity) rose and that the dollar volume of sales was relatively stable during the period. The data show that the industry was least profitable in the 2 years (1994 and 1995) when domestic sales were at their highest (in quantity). The percentage of firms reporting losses was highest in 1992, when overall industry profits were highest.
    Employment: The average number of contract workers employed in grower establishments rose from 14,394 persons in 1991 to 18,867 in 1995. Similarly, the average number of salaried workers employed in grower establishments rose from 8,685 in 1991 to 11,423 in 1995.