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Agriculture Pays Price for Inaction on Mexican Trucks

by 5m Editor
20 August 2010, at 10:11am

US - Mexico’s trade retaliation against the United States is expanding in size and scope due to the US government not meeting obligations to allow Mexican trucks to operate in the United States.

Due to this inaction, America’s farmers and ranchers are paying a steep price and the American Farm Bureau Federation is calling for immediate action to correct the matter.

The updated retaliation list published by Mexico includes tariffs that take effect today against US pork, certain types of US cheese, pistachios, a wide range of US fruits and vegetables and other farm and non-farm goods.

“Mexico is one of our best trading partners and allowing this retaliation to continue for a provision we are obligated to meet is simply unacceptable,“ said AFBF President Bob Stallman. “The economic impact from this growing list will be significant to many farmers and ranchers.“

Mexico has taken this action because under NAFTA, Mexican motor carriers are allowed to transport international cargo within the U.S. In 2007, the US Department of Transportation announced a demonstration project to begin implementation of the negotiated cross-border trucking provisions. In March 2009, Congress failed to renew the programme to allow a limited number of trucks from Mexico to haul loads into the United States beyond a 25-mile zone.

Mexico brought a NAFTA case against the United States on the issue. A ruling found that the United States was not in compliance with its obligations, and Mexico was granted the authority to retaliate if efforts are not taken by the US to comply.

“As we can see from the growing list of agricultural and food items on Mexico’s retaliation list, America’s farmers and ranchers are particularly vulnerable,“ Mr Stallman said. “We sell a huge amount of food and farm goods to Mexico, so we have a lot to lose. As the retaliation list continues to grow, it comes at a steep cost to U.S. agriculture.“

Under NAFTA, US food and agriculture exports have more than tripled, climbing from an average $3-4 billion per year prior to NAFTA to more than $12 billion in 2007, making Mexico the second largest export market for US agriculture products.

“The US has made significant strides under NAFTA, resulting in increased export opportunities and the creation of thousands of American jobs,“ said Mr Stallman. “But, continued inaction by the US to address our Mexican truck obligations is likely to erode the gains we’ve made.“

NAFTA was fully implemented 1 January 2008. The agreement eliminates tariffs on US agricultural products entering Mexico.

Further Reading

- Go to our previous news item on this story by clicking here.