Mexico last month added pork to the list of US products against which it is retaliating for the failure of the United States to live up to its obligations under the North American Free Trade Agreement (NAFTA) on the trucking issue. Mexico put a 5 percent tariff on most US pork imports.

“The tariff applied to pork will have the effect of placing our products at a price disadvantage vis a vis pork produced in Mexico and imports from Canada and Chile, two pork-producing nations that continue to benefit from zero tariffs in Mexico under their own free trade agreements,“ the pork producer organisations said in a letter sent to the president.

Mexico took action on the trucking issue for the second time after the Obama administration failed to present a proposal for resolving the issue. The Mexican government first retaliated over the issue in March 2009 –placing tariffs on $2.4 billion of US products – after the US Congress 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 Programme was started by the US 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 US obligations under the trade deal. The ruling gave Mexico the right to retaliate.

In their letter, the pork groups pointed out that since 1993 – the year before NAFTA was implemented – US agricultural exports to Mexico have increased by 257 percent, with pork exports growing by 580 percent. Mexico is the second largest market for the US pork industry, which shipped $762 million of pork south of the border in 2009.

You can view the letter to President Obama by clicking here.