U.S. and Mexico Sign Trucking Agreement

Retaliatory tariffs cut in half immediately, others suspended once trucks begin rolling.

Published on: Jul 7, 2011

The U.S. and Mexican governments signed an agreement on Wednesday allowing Mexican trucks to haul goods into the U.S. and cutting Mexico's tariffs on U.S. exports, which include pork, in half. The U.S. exports more than $2.4 billion of goods to Mexico, and Mexican tariffs have included a 5% duty on most U.S. pork. That duty will be suspended when the first Mexican trucks are allowed to carry products into the U.S. later this summer. The agreement resolves a dispute between the two nations over a trucking provision of the 1994 North American Free Trade Agreement.

National Pork Producers Council President Doug Wolf says the agreement is a good first step toward resolving the trucking dispute, and that U.S. pork producers are pleased Mexico has agreed to cut the tariffs on U.S. products. Mexico is the second largest market for U.S. pork, which shipped $986 million of pork there last year. U.S. pork exports to Mexico have increased by 780% since 1993.

Ag Secretary Tom Vilsack says the signed trucking agreement is a major win for U.S. agriculture, American jobs and the nation's economic prosperity. Vilsack says the dispute has cost U.S. businesses more than $2 billion and reduced exports of affected ag commodities by 27%.

Vilsack says the phase-in begins July 8 when Mexico will reduce the existing tariffs on U.S. goods by 50%, suspending the remaining 50% within five days from the day the first Mexican carrier receives authorization under the new program. Vilsack says a total lifting of the punitive tariffs potentially could happen in as little as 45 days. He says the agreement will allow America's farmers and ranchers to continue leading the way to America's economic recovery by supporting more than 1.1 million jobs this year.

National Cattlemen's Beef Association Manager of Legislative Affairs Kent Bacus and American Farm Bureau Federation President Bob Stallman agree the trucking agreement signed Wednesday is the first of two important hurdles U.S. and Mexico needed to cross. Bacus says the U.S. exports more beef to Mexico than any other country, with Mexico purchasing $819 million worth of beef last year alone. He says cattlemen are relieved the dispute has been resolved before U.S. beef joined the ranks of other U.S. commodities hit with tariffs.

Bacus says the beef industry would lose market share that would be difficult to regain if U.S. beef imports were added to the list of tariffed commodities. He says it's critical to continue building the relationship with Mexico, and Stallman says it's important for the U.S. to live up to its trade agreement obligations under NAFTA.