Following long, drawn out negotiations, the trucking issue between the United States and Mexico has reached a final and satisfactory conclusion. The two governments signed an agreement today that will allow Mexican trucks to haul goods into the United States, and it will cut Mexico’s tariffs on U.S. exports into that country, including pork, by half.
The agreement resolves a long-standing dispute between the two countries over a trucking provision of the 1994 North American Free Trade Agreement (NAFTA). The provision was set to become effective in December 1995, but the United States failed to abide by it, and limited Mexican truckers from hauling goods into the United States, even to reach Canada.
In February 2001, a NAFTA dispute-settlement panel ruled that excluding Mexican trucks violated U.S. obligations under the trade deal. The ruling gave Mexico the right to retaliate, but the United States delayed the retaliation by implementing a pilot program in September 2007 that allowed a limited number of Mexican trucks into America. In March 2009, the U.S. Congress failed to renew the pilot program and Mexico imposed tariffs on 89 U.S. products. It added products, including pork, in August 2010 after the Obama administration failed to present a proposal for resolving the trucking dispute.
In all, Mexico placed tariffs on more than $2.4 billion of U.S. goods, including a 5 percent duty on most U.S. pork.
The tariffs will drop by 50 percent once the Mexican government gives public notice of the agreement, which is expected to occur by this Thursday, July 7. When the first Mexican trucks are allowed to carry products into the United States, the duties will be suspended. That’s expected to be accomplished by late summer.
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’s implementation– U.S. pork exports to Mexico have increased by 780 percent.
“U.S. pork producers are very pleased that Mexico has agreed to cut the tariffs on U.S. products, including pork. It’s a good first step toward resolving the trucking dispute,” says Doug Wolf, president of the National Pork Producers Council., a producer from Lancaster, Wis. “Now we need the U.S. government to follow through by allowing Mexican trucks into the country so that tariffs on our products will be suspended.”