U.S. pork exports to Mexico have fallen by 20 percent since the Mexican government added a 5 percent tariff on most U.S. pork imports. Mexico has levied the tariff for the failure of the United States to live up to a trade obligation of the 1994 North American Free Trade Agreement.
Mexico is the leading destination for U.S. pork exports by volume, and the second-largest market in terms of value, according to the United States Meat Export Federation. The U.S. pork industry shipped $762 million of pork south of the border in 2009 - an all-time record.
Total pork and pork variety meat exports to Mexico fell by about 12 percent in September compared to August. But exports of hams and shoulders – the cuts subject to the new tariff – dropped by more than 20 percent. Meanwhile, Canada’s pork exports to Mexico – which are not subject to the tariff – increased by more than 30 percent. Philip Seng, USMEF president and chief executive officer, says those who downplayed the significance of the tariff may have underestimated its impact.
The National Pork Producers Council has been urging the Obama administration to resolve the trucking disputeas as quickly as possible. The controversy erupted in March 2009 after the U.S. Congress failed to renew a pilot program covering Mexican trucking companies.
In August, Mexico added products, including pork, dairy and apples, to its initial retaliation list of 89 products after the Obama administration failed to present a proposal for resolving the trucking issue.
According to recent data from the U.S. Department of Commerce and the Canadian government, U.S. pork exports to Mexico dropped by nearly 5,000 metric tons from August to September – a loss of about $9 million.
“The trucking issue needs to be resolved now, before the U.S. pork industry loses even more of its market share in Mexico,” said NPPC President Sam Carney, a pork producer from Adair, Iowa. “We’re talking about the livelihoods of American hog farmers; we’re talking about lost U.S. jobs. And it isn’t just the pork industry; this is happening to the producers of the other 98 products on the retaliation list.”
Source: NPPC, USMEF