An analysis of NAFTA and other factors impacting the U.S.-Mexico fresh winter tomato market

The market for winter tomatoes in the U.S. is very important to Florida and Mexican producers. In 1995, Florida producers filed a petition with the U.S. International Trade Commission (ITC) to seek protection because of a Mexican tomato import surge to the U.S. market. Florida producers also claimed that Mexican producers were dumping tomatoes in the U.S. market. In this study, we examined factors that may have affected Florida and Mexico shares of the U.S. fresh winter tomato market. Threestage least squares were used to estimate supply, demand, and excess supply equations. The results suggest that Mexican exports were responsive to the peso devaluation and prices in the U.S. and Mexican markets and that U.S. producers reacted to the passage of NAFTA and the suspension agreement of late 1996, which suspended the ITC antidumping investigation and set a minimum price for imported Mexican tomatoes.