Outlining the need to regain full duty-free access to the US dairy industry’s largest export market, the International Dairy Foods Association (IDFA) strongly supports the proposed cross-border trucking agreement between the United States and Mexico developed by the US Department of Transportation (DOT).
The proposal addresses safety concerns and US compliance with trade obligations to Mexico that will allow the two nations to fulfill their respective obligations under the North American Free Trade Agreement (NAFTA).
“This is an important step toward a solution that will put an end to the retaliation against our industry’s products,” said Clay Hough, IDFA senior group vice-president and general counsel. “Not only will this resolve a long-standing dispute, but the agreement will send a clear signal to trading partners that the United States is serious about the reciprocal fulfillment of trade obligations.”
In 2010, Mexico imported more than $837 million of US dairy products, which was more than double the value of US dairy exports to the industry’s second-largest export market. However, since tariffs on several American cheeses were added to Mexico’s retaliation list in August 2010, exports of targeted cheeses have been down 60% through February 2011.
IDFA, in written comments to the US DOT, stressed the importance of avoiding problems that surfaced in the past and finding a permanent solution.
“The current dispute began in 2009, when Congress passed an appropriations bill that eliminated the funding for the previous cross-border trucking pilot program with Mexico,” said Hough. “Now several legislators have expressed their opposition to this new proposal and have threatened to stop it when the relevant appropriations legislation will be considered by Congress early this summer.”
To ensure that the tariffs are terminated permanently, the Mexican trucks must receive permanent authority to operate within the United States. This will require implementing a long-term cross-border trucking program after the pilot program ends.
“We urge Congress to support a permanent resolution of this issue, which is important to maintain a critical market for US dairy exports,” said Hough.
Under terms of the DOT proposal, Mexico and the United States have agreed that 50% of the retaliatory tariffs currently in place will be suspended when the agreement is signed. The remaining 50% will be suspended when the first Mexican carrier is authorized to operate under the pilot program.
