Mexican trucking dispute causing major damage to US pork – exports of pork plummet by 20%

In August, Mexico put a 5 percent tariff on most U.S. pork imports, as well as tariffs on other U.S. products, in reprisal for the United States 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.

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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 $2.4 billion of U.S. goods after the U.S. Congress failed to renew a pilot program that let a limited number of Mexican trucking companies to haul freight beyond a 25-mile U.S. commercial zone.

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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.

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According to recent data from the U.S. Department of Commerce and the Canadian government, U.S. pork exports to Mexico dropped by nearly 5,000 metric tons from August to September – a loss of about $9 million – while Canadian pork exports increased by almost 2,000 metric tons.

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“The trucking issue needs to be resolved now, before the U.S. pork industry loses even more of its market share in Mexico,” said NPPC President Sam Carney, a pork producer from Adair, Iowa. “We’re talking about the livelihoods of American hog farmers; we’re talking about lost U.S. jobs. And it isn’t just the pork industry; this is happening to the producers of the other 98 products on the retaliation list.”

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Mexico is the second largest market for the U.S. pork industry, which shipped $762 million of pork south of the border in 2009. Since 1993 – the year before NAFTA was implemented – U.S. pork exports to Mexico have increased by 580 percent.

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