Read the Management Focus on, “NAFTA’s Tomato Wars,” available in your e-book (page no. 620), and answer the following questions:
Assignment Question(s):(Marks: 5)
- Was the establishment of a minimum floor price for tomatoes consistent with the free trade principles enshrined in the NAFTA agreement?
- Why, despite the establishment of a minimum floor price, have imports from Mexico grown over the years?
- Who benefits from the importation of tomatoes grown in Mexico? Who suffers?
- Do you think that Mexican producers were dumping tomatoes in the United States?
- Was the Commerce Department right to establish a new minimum floor price rather than scrap the agreement and file an antidumping suit? Who would have benefited from an antidumping suit against Mexican tomato producers? Who would have suffered?
- What do you think will be the impact of the new higher floor price? Who benefits from the higher floor price? Who suffers?
- What do you think is the optimal government policy response here? Explain your answer.