August 18, 2010

Mexico to impose tariffs on US pork

Mexico will impose import tariffs on pork and other US goods due to the US government's failure to restore a programme allowing Mexican trucks to operate north of the border, an official said.

Mexico's government is waiting for the US to propose a resolution to the standoff, which started when the US Congress ended a pilot programme allowing Mexican trucks to deliver goods in the US Mexico responded in March 2009 by putting tariffs of 10% to 45% on US goods. Now, authorities are imposing a second round of tariffs covering more goods.

Hog futures for October settlement rose 0.2 cent, or 0.3%, to 74.85 cents a pound on the CME. Investors are waiting to see how big the tariffs will be and whether Mexican demand will decrease because of the measure, analysts said.

Mexico is the second-largest export market for US pork products, with US$762 million worth exported there in 2009, according to the pork council. Japan is the largest export market.

US Trade Representative Ron Kirk said the US is working with Congress to resolve the trucking dispute.
 

According to officials, 54 of the products that will be subject to tariffs will be agricultural and the rest will be manufactured goods.

The 2007 pilot programme, which let as many as 100 Mexican trucking companies that met safety rules haul cargo into the US, was canceled last year under a provision in a spending bill passed by Congress.