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)
1. Was the establishment of a minimum floor price for tomatoes consistent with the free trade principles enshrined in the NAFTA agreement?
2. Why, despite the establishment of a minimum floor price, have imports from Mexico grown over the years?
3. Who benefits from the importation of tomatoes grown in Mexico? Who suffers?
4. Do you think that Mexican producers were dumping tomatoes in the United States?
5. 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?
6. What do you think will be the impact of the new higher floor price? Who benefits from the higher floor price? Who suffers?
7. What do you think is the optimal government policy response here? Explain your answer.