NOGALES, Ariz., Feb. 1, 2013 /PRNewswire/ -- If the U.S. Department of Commerce refuses to accept good-faith concessions by Mexico's tomato-growing industry after months of negotiating a trade agreement, it signals a dangerous precedent that would have unintended consequences for U.S. jobs, said an industry group that fears a broad trade war could break out.
"If the Commerce Department kills the tomato trade agreement, this will almost certainly threaten the livelihood of hundreds of thousands of American workers, seriously strain thousands of American businesses and needlessly impose a substantially higher cost to American consumers of tomatoes," said Lance Jungmeyer, President of the Fresh Produce Association of the Americas (FPAA). "What's more, the Commerce Department risks igniting a trade war with our second-largest trading partner, a war that could impact exports of other American commodities."
Jungmeyer added that if the Commerce Department ultimately chooses to abandon the 16-year-old agreement, American workers, business owners and consumers ought to ask one simple, but important question: Why?
FPAA's brief in support of continuing the Tomato Suspension Agreement, filed this week with the Commerce Department, includes facts on the U.S. economic stake in Mexican tomatoes that bring three important questions into sharp focus:Why would the U.S. government risk the enormous economic benefit American businesses, workers and communities reap from the import of Mexican tomatoes to the U.S.?
- More than 81 cents of every dollar American consumers spend on Mexican tomatoes goes to workers and businesses in the U.S. that make up the supply chain – distributors, shippers, retailers and many other ancillary services. This formula is derived from the USDA Food Dollar series.
- Mexico sold $1.8 billion in tomatoes to the U.S. market in 2011, as valued at the first point of sale. In total, the $1.8 billion in Mexican tomatoes equals a food dollar value of $9.47 billion, based upon the USDA/ERS calculations. Using these same calculations, this means that the $1.8 billion in Mexican tomatoes generates an additional $7.67 billion in economic activity, after the first point of sale.
- Indirectly, the sale of Mexican tomatoes in the U.S. generated approximately $7.7 billion in total economic activity, according to 2011 figures.
- Of the 81 cents not generated after the first point of sale, a full 38.5 cents goes toward U.S. labor, a significant stakeholder in the public interest.
- This labor is comprised of warehouse workers, such as the thousands employed in the border regions that import Mexican tomatoes, not to mention the laborers at the many repacking operations and wholesalers scattered around the United States.
- According to the above USDA/ERS calculations, the Mexican tomato supply chain generated $3.64 billion in labor activity in the United States in 2011, after the point of first sale. This equates to 275,000 full-time job equivalents.
- This includes not only distributors, truckers, retailers, but also revenues that go to media that run advertising about the tomatoes; businesses that fuel and repair the trucks that take the tomatoes to market; and many other ancillary providers. And they operate in communities across the U.S., communities that benefit from the trade.
- For example, Mexican tomatoes generated four cents out of every dollar spent in the U.S. for the transportation sector in the United States in 2011, or $378 million.
- Another 8 cents of every dollar goes toward packaging. Using the above USDA/ERS calculations, this means that Mexican tomatoes generated $757 million in packaging sector economic activity in the United States in 2011.
- Another 3.5 cents out of every dollars spent in the U.S. on Mexican tomatoes goes to taxes, an equivalent of $63 million in 2011 that went to community chests across the country.