Mexico may terminate anti-dumping tariffs on US beef

The Mexican government may eliminate existing anti-dumping duties on imports of US beef, according to a memorandum that the US Meat Export Federation (USMEF) sent to its members on Friday (June 4).

The anti-dumping duties, in effect since 2000, are scheduled to sunset after five years but can be extended upon request. Such request was successful in 2005 and recently was filed again, prompting this year's review. However, the party that filed the request, an association of Mexican cattle producers named the Confederacion Nacional de Ganaderos (CNOG), recently withdrew its request.

Thad Lively, USMEF's senior vice president for trade access, emphasised in the note that Mexico's Ministry of the Economy has yet to act on the request, but he said it is a positive development. "We have been asked by the ministry to respond to CNOG's request, and we definitely plan to do so," he said. "Obviously, we support the request and feel it should represent a major step toward elimination of the duties."

The anti-dumping duties date back to 1998, when the Mexican beef industry requested an investigation into whether US beef was being shipped into the country at less than the cost of production. After examining price data on beef imports and concluding injury to its beef industry, Mexico began assessing duties on boneless and bone-in muscle cuts. Three major packers and certain product categories are largely exempt from the duties, but they still apply to about half of all US beef exported to Mexico.

In preparation of a filing seeking elimination of the duties, USMEF has worked closely with the eight largest US packers whose products have been affected.

"Our goal is to successfully argue that if these duties are eliminated, the Mexican beef industry will not be injured," Lively said. "They are simply not going to see a flood of products coming across the border or a depression of prices for Mexican products."

The duties range from 3-29 cents per pound. While these rates are low compared to tariffs assessed in some other global markets, Lively said the impact of the duties should not be underestimated.

"In a market where margins can be pretty thin, these duties are often the difference in whether a company can profitably export to Mexico," he said. "We have seen most companies whose products are subject to the duties drop out of the market. So these companies will see a positive impact if and when the duties are eliminated."