Last month Mexico added pork to the list of U.S. products against which it is retaliating for the failure of the U.S. to live up to its obligations under the North American Free-Trade Agreement on the trucking issue. Mexico put a 5% tariff on most U.S. pork imports.
Since 1993 – the year before N.A.F.T.A. was implemented – U.S. agricultural exports to Mexico have increased by 257%, with pork exports growing by 580%, the pork groups pointed out in their letter. Mexico is the second-largest market for the U.S. pork industry, which shipped $762 million of pork south of the border in 2009.
“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 organizations said in a letter sent yesterday to the president.
Mexico took action on the trucking issue for the second time after the Obama administration failed to present a proposal to resolve the issue. The Mexican government first retaliated over the issue in March 2009 – placing tariffs on $2.4 billion of U.S. products – after the U.S. Congress failed to renew a pilot program that allowed a limited number of Mexican trucks to haul freight into U.S. beyond a 25-mile commercial zone.
The Cross-Border Trucking Pilot Program was started by the U.S. Department of Transportation in September 2007 as a way to begin implementing the N.A.F.T.A. trucking provision, which was supposed to take effect in December 1995.
In February 2001, a N.A.F.T.A. dispute-settlement panel ruled that excluding Mexican trucks violated U.S. obligations under the trade deal. The ruling gave Mexico the right to retaliate.