November 22, 2010
US pork exports to Mexico drop by 20%
US pork exports to Mexico have fallen by a whopping 20% since the Mexican government added pork to the list of US products against which it is retaliating for the failure of the US to live up to a trade obligation.
In August, Mexico put a 5% tariff on most US pork imports, as well as tariffs on other US products, in reprisal for the US not complying with a provision of the 1994 North American Free Trade Agreement (NAFTA) that allows Mexican trucks to haul goods into America. 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 dispute, which first erupted in March 2009 when Mexico placed higher tariffs on an estimated US$2.4 billion of US goods after the US Congress failed to renew a pilot programme that let a limited number of Mexican trucking companies to haul freight beyond a 25-mile US commercial zone.
Mexico in August added products, including pork, dairy and apples, to its initial retaliation list of 89 products after the Obama administration failed to present a proposal for resolving the trucking issue.
According to recent data from the US Department of Commerce and the Canadian government, US pork exports to Mexico dropped by nearly 5,000 tonnes from August to September - a loss of about US$9 million - while Canadian pork exports increased by almost 2,000 tonnes.
"The trucking issue needs to be resolved now, before the US pork industry loses even more of its market share in Mexico. We're talking about the livelihoods of American hog farmers; we're talking about lost US jobs. And it isn't just the pork industry; this is happening to the producers of the other 98 products on the retaliation list," said NPPC President Sam Carney, a pork producer from Adair, Iowa.
Mexico is the second largest market for the US pork industry, which shipped US$762 million of pork south of the border in 2009. Since 1993 - the year before NAFTA was implemented - US pork exports to Mexico have increased by 580%.
