The source for trade compliance news

Mexican Tomato Inspections Could Cause Congestion for All Goods Across Border, Trade Groups Say

Mandatory inspection requirements in a proposed agreement to avoid antidumping duties on Mexican tomatoes could prompt “significant bottlenecks” at ports of entry and “contribute to sustained border congestion,” the American Trucking Associations said in comments on the agreement it recently submitted to the Commerce Department via the agency's ACCESS database (login required, docket A-201-820). Those increased delays at the southern border “would have devastating consequences for all our members engaged in cross-border business, not just those hauling tomatoes,” the trade group said.

Under the proposed suspension agreement, Commerce and U.S. tomato growers would agree to hold off on imposing AD duties in return for minimum prices for Mexican tomato imports and, controversially, quality and grade inspections of round tomatoes, Roma tomatoes (including stem-on) and grape tomatoes in bulk. U.S. Department of Agriculture inspectors would base the inspections on U.S. Standards for Grades, and any tomatoes that aren’t up to grade would have to be re-conditioned or returned to Mexico. Comments on the agreement were due Sept. 9 (see 1908210026).

While importers estimate that would require inspection of up to 92 percent of tomato imports, Commerce has suggested a lower inspection rate of 66 percent, Walmart said in its comments. But even that is a substantial increase in current inspection rates for tomatoes. And “given the high quality and low failure rate of Mexican tomatoes, such intensive inspections do not seem proportionate to the risk,” Walmart said. If imposed, the inspection requirements should be calibrated to “a more appropriate rate,” and Commerce should also consider a trusted trader program for qualified importers, Walmart said.

As it stands, the inspection requirement is a “non-tariff, not-duty barrier to trade in fresh tomatoes” that “will result in bottlenecks at U.S.-Mexico ports of entry, increased border-area congestion, and diminished product freshness, quality and shelf-life, all of which will result in higher costs that will be passed on to U.S. consumers,” the Border Trade Alliance said. The quality and condition inspection mandate “does not identify a specific security, safety, or health concern the administration is attempting to address,” and the proposal runs counter to CBP efforts to streamline border processes, it said.

The 48-hour window proposed for inspections in the suspension agreement is unacceptable, and will prevent trucks from returning to Mexico for other shipments, unnecessarily straining freight capacity and resulting “in delays and increased costs across a range of industries,” the American Association of Exporters and Importers said. There’s no data to indicate a need for the inspections, either, with only five out of more than 1,200 loads of round field tomatoes inspected in Arizona last year found to be out of grade. “From a risk management perspective, this is an enormous waste of resources,” AAEI said.

The inspection requirements could effectively close the border at Otay Mesa by overloading that port of entry, the Otay Mesa Chamber of Commerce said. Currently, all trucks that need inspection go through a single lane manned by two inspectors, who can take in excess of an hour to conduct an inspection once the produce is offloaded. With 10 percent of trucks carrying tomatoes during peak production season, and only about 1 percent to 2 percent of trucks inspected, “one can easily envision the chaos” caused by having to segregate so many more trucks, it said.

For its part, the Florida Tomato Exchange, which represents domestic growers in the AD duty case, wants to see inspection requirements ramped up even more quickly than proposed by Commerce. While the draft suspension agreement sets mandatory inspection requirements beginning six months from the date it goes into effect to allow for the development of an inspection system, the FTE says importers should still be required to request inspections during that six-month period. “Inspectors are currently available, and although they might not be able to conduct inspections to the fullest level, there is no reason to relieve importers of the obligation to make the request,” the FTE said. It could give the USDA “essential information” to ensure the inspection process is “efficient and effective,” it said.