August 28, 2018

US and Mexico resolve tariff conflicts

US President Donald Trump announced on Monday that the US and Mexico have come to an agreement after months of battling trade disputes, however, the details have yet to be confirmed.

The battle between US and Mexico began mid of this year when US imposed tariffs on steel and aluminium imports from Mexico and Mexico retaliated by imposing 20% - 25% on US dairy exports.

Having reached a consensus yesterday, trade battles are expected to end. But, despite the announcement made by Trump, US dairy industry officials have yet to confirm when the tariffs will specifically end.

Negotiation talks between US and Mexico are part of the North American Free Trade Agreement (NAFTA) and the US will continue to negotiate a final agreement with Canada before the entire package can be submitted to Congress for its approval.

A study by the US Dairy Export Council (USDEC) explained that trade disputes with Mexico and China could cost US dairy farmers 64 cents/cwt through 2023 if the disputes remain. Loss of exports to Mexico alone accounts for 27% of the total losses.

A fact sheet released by the United States Trade Representative today also stated that "for the first time in a United States trade agreement, Mexico and the United States agreed not to restrict market access in Mexico for US cheese labelled with certain names."

The geographical indications (GIs) have become a sticking point because the European Union had negotiated exclusive rights with Mexico for some cheese names they claimed as their own. However, USDEC has not confirmed which US cheese names will be exempted.
 

Source: Dairy Herd Management