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Mexico-U.S. near agreement on bilateral tomato trade pact

By Adriana Barrera

MEXICO CITY (Reuters) - Mexico and the United States expect to reach agreement on a new bilateral tomato trade pact by the end of the month, Mexico's economy minister said on Tuesday.

In September, the United States responded to pressure from Florida tomato growers to end the 16-year trade agreement with Mexico, when the Commerce Department announced a preliminary decision in favor of terminating the pact.

"There have been important advances in these meetings," Bruno Ferrari told reporters, referring to a series of meetings this week between representatives of Mexican and U.S. growers.

"I would expect that if we carry on as we are, we should be ending negotiations before the end of the month."

Ferrari said the two countries agree on two of three sticking points. According to Mexican business sources, the final hurdle remains the minimum price, although both countries have agreed on the packing of Mexican tomatoes and what percentage of exports would receive bargain pricing - from the current 85 percent to Mexico's desired 100 percent.

The pact will remain active for no more than 270 days after September's Commerce Department decision.

Tomatoes are Mexico's chief agricultural export to the United States, and in 2011 Mexico sent $1.88 billion worth of tomatoes to its northern neighbor, up from $580 million in 1996.

Florida growers had long complained that the pact fails to protect them against Mexican tomatoes sold in the United States below the cost of production.

They argue the agreement, which sets a minimum price for Mexican tomatoes sold in the United States, is well out of date and does not reflect their current production costs.

Mexican growers enjoy the stability provided by the agreement, and offered to renegotiate it in the hopes of avoiding a costly new anti-dumping complaint filed by Florida producers.

Florida was an important swing state in last week's U.S. presidential election, won by President Barack Obama. Ferrari had previously said it was "obvious" the Florida Tomato Exchange, which represents the growers, had timed its request to put political pressure on the White House ahead of the vote.

(Reporting by Adriana Barrera, writing by Gabriel Stargardter; Editing by Ron Popeski)

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