US pork exports hurt by Mexican trucking dispute

by November 18, 2010
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WASHINGTON – Since the Mexican government added pork to the list of US products against which it is retaliating for the failure of the United States to live up to a trade obligation, US pork exports to Mexico have plummeted 20%.

Mexico put a 5% tariff on most US pork imports in August, as well as tariffs on other US products, as an answer to the US not complying with a provision of the 1994 North American Free-Trade Agreement that allows Mexican trucks to haul goods into America. The provision was supposed to become effective in December 1995.

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

In August, Mexico added products, including pork, dairy and apples, to its initial retaliation list of 89 products after the Obama administration failed to present a proposal for resolving the trucking issue.

US pork exports to Mexico dropped by nearly 5,000 metric tons from August to September – a loss of about $9 million – while Canadian pork exports increased by almost 2,000 metric tons, according to recent data from the US Department of Commerce and the Canadian government.

NPPC President Sam Carney, a pork producer from Adair, Iowa, said the trucking issue needs to be resolved now, before the US pork industry loses even more of its market share in Mexico.

Mexico is the second-largest market for the US pork industry, which shipped $762 million of pork to that country in 2009. US pork exports to Mexico have increased by 580% since 1993, the year before NAFTA was implemented.
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