The Obama administration announced today that an agreement in principle has been reached with Mexico to resolve a trade impasse over allowing Mexican trucks to haul goods into the United States. The trucking dispute prompted Mexico to place tariffs on a host of U.S. products, including pork.
In August, Mexico levied a 5 percent tariff on U.S. bone-in hams – an important export item – and 20 percent on cooked pork skins in retaliation for the United States not complying with the trucking provision of the 1994 North American Free Trade Agreement (NAFTA). The provision was supposed to become effective in December 1995.
The National Pork Producers Council has been urging the Obama administration to resolve the trucking issue, which erupted in March 2009 when Mexico placed higher tariffs on an estimated $2.4 billion of U.S. goods.
“This is great news for the U.S. pork industry, as well as for other sectors affected by Mexico’s retaliatory tariffs,” said National Pork Producers Council President Sam Carney. “Pork producers have been hurt by this retaliation.”
“We’re grateful to President Obama, Transportation Sec. Ray LaHood and USTR Ambassador Ron Kirk for their efforts in reaching this agreement with Mexico. We’re also grateful to President Calderon and his administration for their efforts on this issue.”
The issue won’t be completely resolved until the United States is in full compliance with its NAFTA obligation on trucking. Mexico has agreed to suspend its retaliatory tariffs. Opponents of the NAFTA trucking provision claim there are safety issues with Mexican trucks, but available data, including data collected as part of the pilot program, demonstrate the safety of Mexican trucks, which must meet U.S. standards.
“I have no doubt the data generated under the new agreement will show that Mexican trucks are safe,” Carney said. “It is imperative that Congress support this agreement. Any attempt to stop or otherwise undermine the agreement will invite Mexico to reinstate retaliatory duties on pork and other products, causing the United States to lose exports and jobs.”
Mexico is the second largest market for the U.S. pork industry, which shipped $986 million of pork south of the border in 2010. Since 1993 – the year before NAFTA was implemented – U.S. pork exports to Mexico have increased by 780 percent.