U.S. and Mexico resolve cross-border trucking dispute and agree to phase-out tariffs
By Agri-Pulse staff
© Copyright Agri-Pulse Communications, Inc
WASHINGTON, D.C., July 6 - The U.S. and Mexico signed an agreement today to resolve the cross-border long-haul trucking dispute and eventually lift more than $2 billion in retaliatory tariffs that Mexico imposed on U.S. farm products and manufactured goods more than two years ago. U.S. Transportation Secretary Ray LaHood and Secretaría de Comunicaciones y Transportes Dionisio Arturo Pèrez-Jàcome Friscione joined today in Mexico City to sign the agreements.
The phased-in agreement starts July 8 and provides that Mexico will suspend 50 percent of the retaliatory tariffs within ten days and the remainder of the tariffs within five days of the first Mexican trucking company receiving its U.S. operating authority. As a result, Mexican tariffs that now range from five to 25 percent on an array of U.S. agricultural and industrial products such as apples, certain pork products, and personal care products would be immediately cut in half and will disappear entirely within a few months.
Mexican trucks will be required to comply with all Federal Motor Vehicle Safety Standards and must have electronic monitoring systems to track hours-of-service compliance. In addition, the U.S. Department of Transportation will review the complete driving record of each driver and require all drug testing samples to be analyzed in Department of Health and Human Services-certified laboratories located in the U.S. The Department will also require drivers to undergo an assessment of their ability to understand the English language and U.S. traffic signs. The new agreement also ensures that Mexico will provide reciprocal authority for U.S. carriers to engage in cross-border long-haul operations into that country.
Agriculture Secretary Tom Vilsack described the agreement as a “major win for U.S. agriculture, American jobs and our nation's economic prosperity.”
"For U.S. farmers and ranchers, the lifting of these tariffs means jobs and fiscal relief-lifting constraints on American products, removing barriers to trade with a key trading partner, and putting Americans back to work at a time when U.S. agriculture is setting record export figures. Mexico is U.S. agriculture's third-ranked trading partner, buying $14.5 billion of U.S. farm goods last year. Already in 2011, exports to Mexico are up nearly 25 percent,” Vilsack said in a statement.
The National Pork Producers Council called the signing a “good first step.” The Mexican government imposed a 5 percent duty on most U.S. pork, which will be reduced by 50 percent after the Mexican government gives public notice of the agreement, which is expected Thursday. When the first Mexican trucks are allowed - later this summer - to carry products into the United States, the duties will be suspended.
“U.S. pork producers are very pleased that Mexico has agreed to cut the tariffs on U.S. products, including pork,”said NPPC President Doug Wolf, a producer from Lancaster, Wis. “Now
we need the U.S. government to follow through by allowing Mexican trucks into the country so that tariffs on our products will be suspended.”
The signing of today's agreement will also result in the reduction in tariffs affecting fresh produce. These tariffs range from 10 percent to 45 percent on certain fruits, vegetables and nuts shipped to Mexico. For example, shippers paying a 40 percent tariff would now pay a 20 percent tariff, according to the deal. The remaining tariffs will be lifted when the first Mexican carrier is authorized under the new Cross-Border Trucking Program.
“Today's agreement between the United States and Mexico means the fresh produce industry will no longer be caught in the middle of a dispute that created an economic barrier to trade for our farmers,” said Tom Nassif, president and CEO of Western Growers. “We look forward to its full implementation later this summer.”
National Cattlemen's Beef Association Manager of Legislative Affairs Kent Bacus said cattlemen are relieved the dispute has been resolved before U.S. beef joined the ranks of other U.S. commodities that were hit with tariffs.
“The United States exports more beef to Mexico than any other country. In fact, Mexican consumers purchased $819 million worth of U.S. beef last year alone. We cannot afford to jeopardize that relationship. This MOU ensures that won't happen,” Bacus said. “NCBA commends the U.S. and Mexican governments for reaching an agreement to resolve this issue before more U.S. commodities are hit with retaliatory tariffs.”
Click here to view the Federal Register notice, MOU, and USTR agreement.
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