Responding to incentives, some links

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For 16 years, the Mexican [tomato] growers have agreed not to sell tomatoes [in the U.S.] below what’s called a reference price. That was supposed to protect Florida [and other U.S.] tomato growers from cheap Mexican tomatoes.

But Florida sales have dropped in half anyway, to as little as $250 million a year, while Mexican sales have tripled to more than $1.8 billion.

 So Florida growers are pushing the Obama administration to end the price agreement.

“What would happen if the suspension agreement went away is free trade would truly exist between Mexico and the U.S. in the tomato industry,” [Reggie] Brown, [head of the Florida Tomato exchange] says.

If the tomato agreement goes away, though, Florida would be free to file an anti-dumping case against Mexico. If that happens, the Commerce Department can impose punitive tariffs on Mexican tomatoes — making them much more expensive and giving Florida an edge.

 Mexico could then put heavy tariffs on billions of dollars in products the U.S. sells there: pork, beef and corn. It would be a trade war.

Some chemical and steel companies say they oppose significant natural gas exports, fearing the overseas sales could raise energy costs for U.S. manufacturers.