Agricultural News
National Pork Producers Council and Ag Secretary Tom Vilsack Pleased with U.S. and Mexico Trucking Agreement
Wed, 06 Jul 2011 12:07:35 CDT
The National Pork Producers Council called a "good first step" the signing today by the U.S. and Mexican governments of an agreement that will allow Mexican truck to haul goods into the United States and that cuts by half Mexico's tariffs on U.S. exports, including pork.
The Mexican tariffs on more than $2.4 billion of U.S. goods, including a 5 percent duty on most U.S. pork, will be reduced by 50 percent after the Mexican government gives public notice of the agreement, which is expected Thursday. When the first Mexican trucks are allowed later this summer to carry products into the United States, the duties will be suspended.
"U.S. pork producers are very pleased that Mexico has agreed to cut the tariffs on U.S. products, including pork. It's a good first step toward resolving the trucking dispute," said NPPC President Doug Wolf, a producer from Lancaster, Wis. "Now we need the U.S. government to follow through by allowing Mexican trucks into the country so that tariffs on our products will be suspended."
The agreement resolves a long-standing dispute between the nations over a trucking provision of the 1994 North American Free Trade Agreement (NAFTA). The provision was set to become effective in December 1995, but the United States failed to abide by it.
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, but the United States delayed the retaliation by implementing in September 2007 a pilot program that allowed a limited number of Mexican trucks into America. When in March 2009 Congress failed to renew the pilot program, Mexico imposed tariffs on 89 U.S. products. It added products, including pork, in August 2010 after the Obama administration failed to present a proposal for resolving the trucking dispute.
Mexico is the second largest market for the U.S. pork industry, which shipped $986 million of pork south of the border in 2010. Since 1993 the year before NAFTA was implemented U.S. pork exports to Mexico have increased by 780 percent.
Agriculture Secretary Tom Vilsack also voiced an opinion on the agreement between U.S. and Mexican governments to resolve the cross-border long-haul trucking dispute by making the following statement:
"The agreement signed today between the governments of Mexico and the United States to resolve the cross-border long-haul trucking dispute is a major win for U.S. agriculture, American jobs and our nation's economic prosperity. President Obama and President Calderon announced a path forward in March to resolve the dispute, and today the U.S. Department of Transportation after months of hard work with Mexican counterparts closed a deal that will provide tariff relief for numerous U.S. agricultural products and manufactured goods.
"This dispute has cost U.S. businesses more than $2 billion. For U.S. farm exports to Mexico, exports of affected commodities were reduced by 27 percent. But today, thanks to the persistent work of the Obama Administration, we have an agreement that not only will ultimately eliminate punitive tariffs, but it also provides opportunities to increase U.S. exports to Mexico and helps to expand jobs on both sides of the border. Moreover, the agreement puts the United States and Mexico on equal footing pertaining to our obligations under the North American Free Trade Agreement, or NAFTA, by authorizing Mexican and U.S. long-haul carriers to engage in cross-border operations subject to certain requirements. Officials at the Department of Transportation say that the new long-haul cross-border trucking program with Mexico established by this agreement will begin a phased-in program built on the highest safety standards.
"The phase-ins begin on July 8, when Mexico reduces the existing tariffs on U.S. goods by 50 percent. The remaining 50 percent will be suspended within five business days from the date on which the first Mexican carrier receives authorization under the new program. Potentially, we're looking at a total lifting of the punitive tariffs in as little as 45 days. Moreover, Mexican carriers participating in the program are subject to certain requirements which will not allow them to haul domestic cargo between points within the United States, which creates additional opportunities for American businesses and workers.
"For U.S. farmers and ranchers, the lifting of these tariffs means jobs and fiscal relief lifting constraints on American products, removing barriers to trade with a key trading partner, and putting Americans back to work at a time when U.S. agriculture is setting record export figures. Mexico is U.S. agriculture's third-ranked trading partner, buying $14.5 billion of U.S. farm goods last year. Already in 2011, exports to Mexico are up nearly 25 percent. Today's agreement will allow America's farmers and ranchers to continue to lead the way to American's economic recovery. U.S. agricultural exports alone will support more than 1.1 million jobs in America this year. And strong U.S. farm exports will be a key contributor to building an economy that continues to grow, innovate and out-compete the rest of the world."
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