US-Mexican Trucking Deal Pleases Pork Producers

by 5m Editor
4 March 2011, at 8:46am

US - The National Pork Producers Council praised the Obama administration for announcing yesterday an agreement in principle with Mexico to resolve a trade impasse over allowing Mexican trucks to haul goods into the United States.

"This is great news for the US pork industry, as well as for other sectors affected by Mexico’s retaliatory tariffs. Pork producers have been hurt by this retaliation."
Sam Carney, President of NPPC

The trucking dispute prompted Mexico to place tariffs on a host of US products, including pork. In August, Mexico put a 5 percent tariff on US bone-in hams – a big export item – and 20 percent on cooked pork skins in retaliation for the United States not complying with the trucking provision of the 1994 North American Free Trade Agreement (NAFTA). The provision was supposed to become effective in December 1995.

The National Pork Producers Council has been urging the Obama administration to resolve as quickly as possible the trucking issue, which erupted in March 2009 when Mexico placed higher tariffs on an estimated $2.4 billion of US goods after the US Congress cut off funding to renew a pilot programme that let a limited number of Mexican trucking companies to haul freight beyond a 25-mile US commercial zone.

“This is great news for the US pork industry, as well as for other sectors affected by Mexico’s retaliatory tariffs,“ said NPPC President Sam Carney. “Pork producers have been hurt by this retaliation.

“So we’re grateful to President Obama, Transportation Sec. Ray LaHood, USTR Ambassador Ron Kirk for their efforts in reaching this agreement with Mexico. We’re also grateful to President Calderon and his administration for their efforts on this issue.“

NPPC cautioned that the issue won’t be completely resolved until the United States is in full compliance with its NAFTA obligation on trucking. Mexico has agreed to suspend its retaliatory tariffs. Opponents of the NAFTA trucking provision claim there are safety issues with Mexican trucks, but available data, including data collected as part of the pilot programme, demonstrate the safety of Mexican trucks, which must meet US standards.

“I have no doubt the data generated under the new agreement will show that Mexican trucks are safe,“ Mr Carney said. “It is imperative that Congress support this agreement. Any attempt to stop or otherwise undermine the agreement will invite Mexico to reinstate retaliatory duties on pork and other products, causing the United States to lose exports and jobs.“

Mexico is the second largest market for the US pork industry, which shipped $986 million of pork south of the border in 2010. Since 1993 – the year before NAFTA was implemented – US pork exports to Mexico have increased by 780 per cent.

Statement by AFBF

Bob Stallman, President of the American Farm Bureau Federation (AFBF), said that the organisation is pleased that President Barack Obama and Mexican President Felipe Calderon have reached an agreement to resolve the dispute over cross-border trucking.

"This agreement has been a long time coming and, with half of the $2.4 billion in Mexican retaliatory tariffs to be lifted as soon as the agreement is finalized, this will have an immediate positive impact on US agricultural exports. The remainder of the tariffs will be lifted when the necessary safety tests are completed and the first Mexican truck rolls across the US border. We hope that the administration will push forward to finalize the agreement quickly," Mr Stallman said.

“It is important for our trading partners to know that the United States lives up to its commitments under trade agreements. Re-establishing a reciprocal cross-border trucking program will go a long way toward restoring our credibility and our relationship with a vital trade partner," he said.

“Mexico is our third-largest agricultural export market. Our farm and ranch exports to Mexico have, however, been hampered by this dispute and the retaliatory tariffs. The impact has touched a wide range of farm products from every state. Our competitors are filling the gap. This is not in our economic best interests. One of the straightest roads to economic growth and job creation in the US is for members of Congress to get behind the agreement announced today, and we urge them to do so," Mr Stallman concluded.