Mexico's anti-dumping stance takes surprising turn

by Bryan Salvage
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DENVER – During the past decade, the U.S. Meat Export Federation (U.S.M.E.F.) has been leading a coalition of U.S. beef industry interests seeking to eliminate anti-dumping duties assessed by Mexico on some U.S. beef exports. The origin of these duties dates back to 1998, when the Mexican beef industry requested an investigation by the country's Ministry of the Economy into whether U.S. beef was being shipped into the country at less than the cost of production.

After examining price data on beef imports and reaching a determination of injury to its beef industry, Mexico began assessing duties on boneless and bone-in muscle cuts. Three major packers and certain product categories are largely exempt from the duties, but they still apply to about half of all U.S. beef exported to Mexico.

The duties are scheduled to sunset this year after five years, but can be continued upon a request for review by an interested party. Such a request was successful in 2005 and was recently filed again, triggering this year’s review. However, late last week the association of Mexican cattle producers who requested the latest review (Confederación Nacional de Ganaderos, or C.N.O.G.) notified the Ministry of the Economy of its decision to withdraw the request.

Thad Lively, U.S.M.E.F. senior vice president for trade access, says the withdrawal of C.N.O.G.’s request is very positive news and could expedite elimination of the anti-dumping duties. He cautions, however that the case is certainly not over, and that U.S. interests must continue to participate until the proceeding is officially completed.


“The Mexican Cattlemen’s Association had contacted the Mexican government and asked that the review of these duties be suspended or ended,” he added. “The net affect of that would very likely be that the government will agree because the cattlemen are the ones who asked for the review in the first place. So, the government will have to act on the cattlemen’s request. We have been asked by the Mexican government to respond also. Of course, we support their request to terminate this review so this appears to be a positive development. It’s too early to say for sure what the impact is going to be, but we think this is going in a very positive direction.”

The duties, which have been in place since 2000, range from 3 cents to 29 cents per lb. While these rates may be low compared to tariffs assessed in some other global markets, Mr. Lively says the negative impact of the duties should not be underestimated.
 
“The range of duties are from 3 cents a lb. up to about 30 cents a lb.,” he added. “That doesn’t sound like a lot, but in a market where margins can be pretty thin that can make the difference between being able to profitably export to Mexico and not being able to do that business. Clearly, what we have seen is those companies that are subject to duties have pretty much dropped out of the Mexican market.”
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