Chp 9 – NAFTA Tomatoe WarsSummaryManagementFOCUS: NAFTA’s Tomato Wars
The opening case explores the conflict between U.S. and Mexican tomato producers. With the support of U.S. growers, the United States signed an agreement under NAFTA to establish a price floor on the price of tomatoes. However, U.S. growers later realized that the deal did not offer the protection from Mexican growers that they had anticipated. This led to lobbying for changes to the agreement―lobbying that was met with strong opposition from U.S. tomato companies that have operations in Mexico that would be negatively affected by the proposed changes to the agreement, and also from U.S. companies that supply Mexican growers.
QUESTION 1: Do you agree with the price floor policy for tomatoes that was initially established under NAFTA? Should the deal have been changed? Who benefits from this type of policy? Who is harmed?
QUESTION 2: Explore the long-term implications of the both the original price floor agreement and the more recent agreement to raise the price floor. Do U.S. tomato producers really benefit from these agreements? Why or why not? What other approaches could have been used to help U.S. tomato growers?