ITA TO RULE IN SEPTEMBER ON MEXICAN TOMATO PRICES

JOANNA RAMEY

WASHINGTON (FNS) -- The tomato war between U.S. and Mexican growers continues to be waged, despite one recent federal ruling that said Mexico isn't harming American tomato growers with its low prices.

The next salvo is scheduled for Sept. 5, when the Commerce Department's International Trade Administration will give a preliminary ruling on whether Mexican growers are dumping tomatoes on the U.S. market. A final decision is scheduled for Sept. 25. In the dumping case, U.S. growers only have to show they suffered a material injury from Mexico's lower-priced tomatoes. U.S. growers have already crossed their first hurdle -- in May, the ITC voted there was a "reasonable indication" Mexico was selling tomatoes in the winter growing season below the cost of producing them.

If U.S. growers are victorious, the government would levy punitive tariffs on Mexican imports Jan. 9, which in turn would mean higher wholesale prices for these tomatoes.

With the upcoming case, U.S. growers will attempt to offset last month's ruling against them.

In that case, filed under Section 201 of the U.S. trade laws, the International Trade Commission July 2 ruled that U.S. growers couldn't prove their sector had been substantially injured by Mexican imports in a way that was at least equal to other factors facing the industry, a standard required under the law. However, all sides acknowledge that victory has no bearing on the pending dumping case also filed by U.S. growers, which carries a lower burden of proof than Section 201. In any case, Mexican growers are poised to file challenges, which would mean the dispute would drag on well into 1997 or beyond, according to Robert Hertzstein, a Washington lawyer representing the Mexican growers.

For their part, U.S. growers argue that Mexico's bountiful shipments of inexpensive tomatoes are driving them out of business. The principal competition for Mexican tomatoes comes from Florida.

"If we lose competition from Florida, then the Mexican retail prices are going to go up," said Ray Gilmer, communications director for the Florida Fresh Fruit and Vegetable Association. "They are using predatory pricing to drive us out of business.

"The Commerce Department and the ITC need to come back with a realistic and meaningful tariff that would provide a level playing field in the U.S. market," he said.

Hertzstein's first challenge in disputing U.S. growers' claims is trying to change the time period under which the investigation is being undertaken. Commerce officials have determined the dumping time period to be the last two months of 1994 and 1995 and the first two months of 1995 and 1996.

The season during which Mexico typically ships tomatoes to the United States, and competes with crops from the Southern states, is roughly from November to May.

"If you do the comparisons properly there is no dumping," Hertzstein said.

The time frame chosen by the Commerce Department instead covers the months during which Mexican tomatoes were being sold at their lowest. "That way they are almost bound to find the sales didn't make a profit [for the Mexicans]," Hertzstein said.

Yet precedent may be on the Mexicans' side. In the early 1980s, during an almost identical tomato war which Mexico won, Commerce used the full growing season as the period of investigation.