The U.S. Meat Export Federation says Mexico has published its list of U.S. pork products on which it will impose retaliatory tariffs, amid a cross-border trucking dispute. The tariffs apply to hams, shoulders, cuts thereof, bone-in, fresh/chilled and frozen pork product, as well as cooked pork skin in pieces. The tariff rate on ham and shoulder cuts is 5% and the tariff on cooked skin pellets is 20%. All tariffs were implemented Thursday.
Mexico's new pork tariffs are not expected to stop imports of the meat, which will remain cheaper than pork from other sources in a country that has developed a strong appetite for pork. In three of the past five years, at least 20% of U.S. pork exports have gone to Mexico. It is believed that Mexico will be hard-pressed to replace it from other sources at competitive shipping rates. As a result, analysts expect a quick resolution of the trade dispute.
U.S. Meat Export federation President and CEO Phil Seng says consumers in Mexico and pork producers in the United States are both going to pay a price for a dispute that is certainly not of their making. He called the tariffs an unnecessary barrier that interferes with free trade and offers no benefit to anyone. Industry and government officials are working to resolve the issue.
While pork is the main focus of new Mexican tariffs, the updated retaliation list includes tariffs on certain types of U.S. cheese, pistachios, a wide range of U.S. fruits and vegetables and other farm and non-farm goods. The American Farm Bureau Federation blames the U.S. government for not meeting obligations to allow Mexican trucks to operate in the United States. Farm Bureau says America's farmers and ranchers are paying a steep price and the federation is calling for immediate action to correct the matter.
Mexico has taken action because under the North American Free Trade Agreement, Mexican motor carriers are allowed to transport international cargo within the United States. In 2007, the U.S. Department of Transportation announced a demonstration project to begin implementation of the negotiated cross-border trucking provisions. In March 2009, Congress failed to renew the program to allow a limited number of trucks from Mexico to haul loads into the United States beyond a 25-mile zone.
"Mexico is one of our best trading partners and allowing this retaliation to continue for a provision we are obligated to meet is simply unacceptable," AFBF President Bob Stallman said. "We sell a huge amount of food and farm goods to Mexico, so we have a lot to lose."