ABSTRACT
Soon after the Canada-U.S. Trade Agreement (CUSTA) was signed in 1987 many observers of the Canadian tomato processing industry predicted the latter's imminent decline. The combination of changes in tariffs and technical regulations resulting from CUSTA, in conjunction with the annual tomato processing contract negotiations, conducted by the Ontario Vegetable Growers Marketing Board (OVGMB) and Ontario tomato processors (under the umbrella of the Ontario Food Processors Association (OFPA)), were deemed to be obstacles that die industry could not survive. It is six years later and the industry continues its struggle for survival given the changes in tariffs, technical regulations, and contract bargaining behavior that have occurred since 1987. This chapter assesses the impact of these three sets of policy variables on the competitiveness of the Canadian tomato processing industry using a multi-region, multi-product spatial equilibrium model of the North American industry. 1 Competitiveness is defined here as the "sustained ability to profitably gain and/or maintain market share" (Task Force on the Competitiveness of Canada's Agrifood Industry 1990).
