March 11, 2011

US pork producers welcome progress in trucking dispute

The National Pork Producers Council (NPPC) is grateful that the Obama administration has announced an agreement in principle with Mexico to resolve a trade stalemate over allowing Mexican trucks to haul goods into the US.

The trucking dispute prompted Mexico to place tariffs on a host of US products, including pork. In August, Mexico put a 5% tariff on US bone-in hams - a big export item - and 20% on cooked pork skins in retaliation for the US not complying with the trucking provision of the 1994 North American Free Trade Agreement (NAFTA). The provision was supposed to become effective in December 1995.

The National Pork Producers Council has been urging the Obama administration to resolve as quickly as possible the trucking issue, which erupted in March 2009 when Mexico placed higher tariffs on an estimated US$2.4 billion of US goods after the US Congress cut off funding to renew a pilot programme that let a limited number of Mexican trucking companies to haul freight beyond a 25-mile US commercial zone.

"This is great news for the US 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. So we're grateful to President Obama, Transportation Sec. Ray LaHood, USTR Ambassador Ron Kirk for their efforts in reaching this agreement with Mexico. We're also grateful to President Calderon and his administration for their efforts on this issue."

NPPC cautioned that the issue will not be completely resolved until the US is in full compliance with its NAFTA obligation on trucking. Mexico has agreed to suspend its retaliatory tariffs. Opponents of the NAFTA trucking provision claim there are safety issues with Mexican trucks, but available data, including data collected as part of the pilot programme, demonstrate the safety of Mexican trucks, which must meet US standards.

"I have no doubt the data generated under the new agreement will show that Mexican trucks are safe," Carney said. "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 States to lose exports and jobs."

Mexico is the second largest market for the US pork industry, which shipped US$986 million of pork south of the border in 2010.