Minimum Floor Price Essay

Decent Essays

1. Was the establishment of a minimum floor price for tomatoes consistent with the free trade principles enshrined in NAFTA?
The minimum floor price was set but ended up not helping the U.S. growers, the value of the Mexican tomato exports triple over the same period to $2 billion. Consequently, the Florida production had fallen 41 percent since the NAFTA went into effect. Florida growers complained they could not compete against the low wages and las environmental oversight in Mexico. They also believed Mexican growers were dumping tomatoes in the U.S. market below the cost of production.

2. Why despite the establishment of a minimum floor price have imports from Mexico grown over the years?
Mexico grown tomatoes were more competitive …show more content…

Do you think that Mexican producers were dumping tomatoes in the United States?
Yes, I believe Mexico was dumping tomatoes into the United States, this was done to monopolize the U.S. market by driving U.S. producers out of the tomatoes producing business.

5. Was the Commerce Department right to establish a new minimum floor price, rather than scrap the agreement and file an antidumping suit against Mexican tomato producers? Who would have suffered?
Yes, I do believe that the Commerce Department was right to establish a minimum floor price, this helped the U.S. tomatoes producer stay in the market even through Mexico was more advance in producing tomatoes, the U.S. producer would have benefit from antidumping suit against the Mexican tomato producers, this would have only allowed them to export a certain amount of tomatoes into the United States. Mexican tomatoes producers and tomatoes buyers would have suffered.

6. What do you think will be the impact of the new higher floor price? Who suffers?
Mexican producers will suffer because they have invested billions in their development of greenhouses to grow their product, United States growers will benefit from this because Mexico would have less of a competitive advantage with the new floor price. U.S. producers would have more of a competitive market for producing tomatoes. Mexican producer would not continue to dump tomatoes into the U.S.

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