Here’s a brief history of the dispute. In 2009, Congress dropped funding for a pilot cross-border trucking project based on continued concerns about the safety of Mexican trucks. The Mexican government charged the trucking program ban violated the North American Free-Trade Agreement’s (NAFTA) cross-border trucking commitments. A NAFTA dispute-settlement panel agreed and allowed Mexico to retaliate by placing high tariffs on US goods, including pork.
News of the breakthrough was praised by the National Pork Producers Council. In August, Mexico slapped a 5% tariff on US bone-in hams and 20% on cooked pork skins in retaliation for the US not complying with the trucking provision of the NAFTA. Mexico is the second-largest market for the US pork industry; in 2010, the US exported $986 million of pork to Mexico. US pork exports to Mexico have increased by 780% since 1993, which is the year before NAFTA started up.
In March 2009, the trucking dispute worsened after Mexico slapped higher tariffs on an estimated $2.4 billion of US goods after the US Congress eliminated funding to renew a pilot program that allowed a limited number of Mexican trucking companies to haul freight beyond a 25-mile US commercial zone.
Although this recent agreement is good news for US pork producers, NPPC cautioned the issue won’t be completely resolved until the US is in full compliance with its NAFTA obligation on trucking. In the meantime, Mexico has agreed to suspend its retaliatory tariffs.
Not all are happy with yesterday’s news. Safety issues still remain with Mexican trucks, NAFTA trucking provision opponents charge. But proponents point out that based on available data, including data collected as part of the pilot program, Mexican trucks must meet US standards and therefore are safe.
“I have no doubt the data generated under the new agreement will show Mexican trucks are safe,” said Sam Carney, NPPC president and a pork producer from Adair, Iowa. “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 US to lose exports and jobs.”