Mexico hikes pressure to resolve trucking dispute, targeting pork & Midwest

Mexico hikes pressure to resolve trucking dispute, targeting pork & 'different parts of the country'

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.



Washington, Aug. 16 - The Mexican government announced Monday that it is revising its list of U.S. products subject to $2.4 billion in retaliatory tariffs. The 99 products on the list now will include pork, dry apples and oranges along with 51 other agricultural products and 45 manufactured products. The new list to be released later this week will include new products such as pork along with products from the original list released in March 2009. (To read the original list, go to: www.agri-pulse.com/uploaded/20090320H.pdf.)

In announcing the new list, the Mexican government noted that “In March 2009, the Government of Mexico was forced to exercise its right, as established under the North American Free Trade Agreement (NAFTA), to suspend trade benefits to a number of U.S. products after the U.S. Congress' unilateral decision to cancel the Cross-Border Trucking Services Demonstration Program between the United States and Mexico.” It added that it was “initially encouraged by the fact that in December 2009 the U.S. Congress removed the legal restriction on the Department of Transportation's budget that banned the use of funds to implement the cross-border trucking program with Mexico.” But it said that since then, “Mexico has yet to receive a formal proposal for the resolution of this dispute and an unequivocal signal that the U.S. government is working to eliminate the barriers that Mexican long-haul carriers face to access the U.S. market.”

Mexico insists that “Resolving the trucking dispute is crucial to job creation, to the acceleration of the economic recovery of both nations, and the deepening of our trade relations. A seamless operation of cross-border trucking is essential for the competitiveness of our two countries and of the entire North American region in the global market place.”

Left unsaid but clear from the revised list is that while Mexico is imposing the same $2.4 billion in the value of the tariffs, it is revising its list to target different parts of the U.S. The original list included a number of West Coast agricultural products. With the addition of pork in the new list, the Midwest may be a prime target of the new tariffs, with the likely result that Midwestern members of Congress will be under greater pressure to support a resolution of the trucking dispute.

Reacting to the new list, the National Pork Producers Council (NPPC) warned Monday that failure to resolve the dispute could have an escalating impact. NPPC President Sam Carney said “That failure not only has hurt dozens of U.S. industries economically, but it could prompt other countries to think twice about entering into trade deals with the United States. Our trading partners need assurance that the United States will live up to its trade obligations.”

Carney added that in terms of the pork industry, “Mexico's retaliation against U.S. pork will have negative economic consequences for America's pork producers. We are extremely disappointed that our top volume export market has taken this action, but we're more disappointed that the United States is not living up to its trade obligations.

The U.S. Congress in early March 2009 failed to renew a pilot program that allowed a limited number of Mexican trucks to haul freight into United States beyond a 25-mile commercial zone. The Cross-Border Trucking Pilot Program was started by the U.S. Department of Transportation in September 2007 as a way to begin implementing the NAFTA trucking provision, which was supposed to take effect in December 1995.

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 against U.S. products, which it did in March 2009, placing higher tariffs on more than $2.4 billion of U.S. goods. Pork was not included on that initial retaliation list.

“Mexico is a top market for all kinds of U.S. exports, providing millions of jobs to U.S. workers,” said Carney. “The retaliation puts thousands of agricultural jobs at risk, including, now, pork industry jobs, and thousands of manufacturing jobs at risk.”

NPPC has been urging the Obama administration to work with Congress to quickly resolve the trucking issue with Mexico, which last year bought $762 million of U.S. pork.

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