By Sara Wyant

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, March 3 - President Obama and President Calderón today announced that Mexico and the United States have found a path to resolving the cross-border long-haul trucking dispute. This path will allow for the establishment of a “reciprocal, phased-in program” that will authorize both Mexican and United States long-haul carriers to engage in cross-border operations under NAFTA.

The U.S. and Mexico agreed to allow cross-border trucking as part of the 1994 North American Free Trade Agreement (NAFTA). But the trucking issue erupted in March 2009 after the U.S. Congress cut off funding to renew a pilot program that let a limited number of Mexican trucking companies haul freight beyond a 25-mile U.S. commercial zone. Mexico retaliated by placing higher tariffs on an estimated $2.4 billion of U.S. goods.

Once a final agreement is reached, Mexico will suspend its retaliatory tariffs in stages beginning with reducing tariffs by 50% at the signing of an agreement and will suspend the remaining 50% when the first Mexican carrier is granted operating authority under the program. Mexico will terminate all current tariffs once the program is normalized. The agreed schedule will not affect the rights and obligations of Mexico or the United States under NAFTA, including Mexico's right to apply its retaliatory measures.

The National Pork Producers Council (NPPC) praised the Obama administration for announcing an agreement in principle with Mexico to resolve a trade impasse over allowing Mexican trucks to haul goods into the United States. The trucking dispute prompted Mexico to place tariffs on a host of U.S. products, including pork. In August, Mexico put a 5% tariff on U.S. bone-in hams – a big export item – and 20% on cooked pork skins.

“This is great news for the U.S. pork industry, as well as for other sectors affected by Mexico’s retaliatory tariffs,” said NPPC President Sam Carney, a pork producer from Adair, Iowa. “Pork producers have been hurt by this retaliation. Mexico is the second largest market for the U.S. pork industry, which shipped $986 million of pork south of the border in 2010. Since 1993 – the year before NAFTA was implemented – U.S. pork exports to Mexico have increased by 780%.

The American Farm Bureau Federation also expressed its approval with the agreement and urged the administration to move quickly. Farm Bureau President Bob Stallman said “This agreement has been a long time coming and, with half of the $2.4 billion in Mexican retaliatory tariffs to be lifted as soon as the agreement is finalized, this will have an immediate positive impact on U.S. agricultural exports.”

Stallman added that “It is important for our trading partners to know that the United States lives up to its commitments under trade agreements. Re-establishing a reciprocal cross-border trucking program will go a long way toward restoring our credibility and our relationship with a vital trade partner.”

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