| MAY 12, 2011 -- Farmers and producers throughout the United States should be breathing a sigh of relief now that the White House and the Mexican government have come to an agreement on the long-held standoff over Mexican trucks and tariffs. On March 3, the White House announced that the two governments had reached an agreement that would allow Mexican trucks to reenter U.S. roads, a deal that was part of NAFTA but one that has been at the center of controversy for the last 17 years.
Under the new agreement, Mexican long-haul truckers who meet EPA and U.S. Department of Transportation guidelines will be allowed to operate on U.S. highways. Drivers must pass safety, skills and language tests as well. When the agreement is signed, the Mexican government will reduce the export tariffs currently attached to 99 U.S. products by 50 percent. The remaining 50 percent will be eliminated when the first Mexican truck has been certified and enters the U.S.
The Dairy industry has been especially hard hit, as over the last decade, Mexico has emerged as the largest export market for U.S. dairy. Last year alone, Mexico imported at least $837 million of American dairy; more than double that of the next larger export market. Due to the duration of the import tariffs, some Mexican consumers of cheeses and other U.S. dairy products have had to seek alternative producers. Some of these markets may be gone for good to other countries, and in a historically bad year from U.S. dairy, that means a great deal.
Pork producers were also hit hard during the tariff implementation, with a tax on pork products levied between 5 and 25 percent. Mexico is the second largest export market for U.S. pork and recent statistics released from the U.S. Dept. of Commerce reported U.S. pork exports to Mexico dropped by nearly 5,000 metric tons from August to September of 2010, while Canadian pork exports increased by almost 2,000 metric tons.
The agreement between President Barack Obama and Mexican President Felipe Calderon is said to be signed sometime early this summer; however, the Dept. of Transportation will have to draft rules, and it will have to be approved by Congress first. A congressional hearing could happen as early as April and opposition to the measure is sure to surface among Representatives with pro-union constituencies and those who think this deal constitutes the U.S. State Department turning a blind eye to border patrol security issues.
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