Los Angeles Times

MEXICO CITY

--Mexico and the United States are gearing for a costly showdown over fresh tomatoes--a $3.5 billion business for the two countries--in a move that could boost the fortunes of some American tomato farmers but raise prices for U.S. consumers.

Growers in Florida have demanded cuts in imports from Mexico, and Washington appears inclined to support the Floridians and the few farmers from other states who have joined the complaint.

That would require ending a 16-year-old trade agreement and endanger tens of thousands of jobs on both sides of the border, especially in border states, advocates for the Mexican tomatoes say.

It also would probably increase the cost to U.S. consumers of fresh tomatoes, though it's unclear by how much. Mexico provides the United States with about half the fresh tomatoes it consumes, and many of the rest are grown in Florida, the United States' No. 1 producer of fresh tomatoes, followed closely by California.

In the past decade, Mexican growers have ramped up fresh tomato production. In 2000, fresh tomato exports totaled $412 million; by 2011, that figure had jumped to $1.81 billion.

U.S. importers of the Mexican varieties say they are tastier, cheaper and more plentiful year-round. The Florida growers contend Mexico low-balls its prices and makes fair competition impossible, and they asked the U.S. Commerce Department to intervene.

Late last week, the department filed notice of intent to grant the Florida growers' petition, a move that will allow them to formally accuse Mexican producers of illegal dumping. The decision, though preliminary, infuriated Mexico and a host of U.S. companies supporting the Mexican tomato, including major grocery and restaurant chains and California importers.

"We are very disappointed," said Francisco de Rosenzweig, Mexico's top foreign trade official. He said Mexican producers were especially stunned because the Commerce decision came one day before an initial meeting the two sides were to have to discuss renegotiating the trade agreement.

There are fears of a wider trade war if Mexico retaliates by trying to restrict the tons of U.S. meat, poultry, grains or other agricultural products that Mexico buys. Mexico is the United States' largest destination for exports overall, after Canada.

De Rosenzweig did not rule out reprisals. "This is a time we need more commerce, not less, since less hurts jobs and economic recovery," he said.