What Is The Tomato Suspension Agreement

To facilitate the review of post-shipment change of status requests, contracts between the signer and the buyer (if no sales agent is included in the distribution chain) or between the signatory, the seller(s) and the buyer must demonstrate that all documents will be completed within 15 business days of the USDA inspection and that claims will be resolved within 15 business days of the USDA inspection. unless the claim is referred to PACA for mediation. Failure to complete this documentation in a timely manner may constitute a violation of the Agreement under Section VIII.E.10. When submitting quarterly certificates to Commerce in accordance with section VII.D.4, Signatories must declare the number of lots for which claims for defects in quality and condition have been granted, the total quantity of tomatoes destroyed, the total value of claims granted and the total value of payments made by the Signatory and/or seller to the Buyer. If the lot contains quality and condition errors that are more important than those described above and the recipient does not reject the entire batch of tomatoes, the Trade will consider certain adjustments to the transaction price. In particular, the Signatory or the Seller may reimburse the Buyer, if any, for the inspection costs indicated on the USDA Certificate of Inspection and the transport costs attributable to the defective tomatoes. In cases where the buyer has rejected the entire batch of tomatoes due to errors in quality and condition, the signatory or seller may, as the case may be, choose to destroy or return the entire lot. If the entire lot is destroyed, the signatory or sales agent shall require the consignee to have the documents referred to in point B.5 above for partial discharges. In addition, the Signatory or the Seller may reimburse the Buyer for the usual and customary USDA transportation and inspection costs incurred by the Buyer in connection with the Lot, provided that the Signatory or the Seller receives, as the case may be, the supporting documents referred to in point B.5 above. Commerce treats these transactions as „non-sales“ if adequate support documentation is available. The suspension agreement completely eliminates the injurious effects of Mexican tomatoes at unfair prices, prevents price suppression and price undercutting, and essentially eliminates any dumping, while Trade can audit up to 80 Mexican tomato producers and U.S. sellers per quarter or more for good reason. In addition, the agreement also fills in the gaps in previous suspension agreements that allowed sales below reference prices in certain circumstances and includes an inspection mechanism to prevent imports from Mexico of poor quality tomatoes in poor condition, which can have depressing effects on the market.

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