By DOUG SCHMITZ
Iowa Correspondent

ADAIR, Iowa — The National Pork Producers Council (NPPC) last Thursday applauded the U.S. Department of Transportation’s (DOT) efforts to work with Mexico after urging the federal government a month ago to quickly resolve the U.S.-Mexico trucking dispute.

“We applaud any effort by the U.S. administration that will lead to progress in resolving this issue,” said Sam Carney, NPPC president and an Adair, Iowa, pork producer. “Every month that the trucking issue goes unresolved, we continue to lose market share in Mexico – one of our most important export markets.”
Released on Jan. 6, the DOT plan would include such steps as requiring Mexico carriers to apply for “long-haul operating” and be “vetted” by the DOT and the Department of Human Services (DHS), as well as submit to a “pre-authority safety audit” and “documentation of the Mexican commercial driver’s license process to demonstrate comparability.”

The NPPC said the 20 percent drop in U.S. pork exports has severely hurt the industry since the Mexico government added pork products to its retaliation list in August in which a 5 percent tariff was placed on most U.S. pork imports and other products.

“Mexico is our largest volume export market and the retaliation Mexico has put in place on pork has hurt U.S. pork producers,” Carney added.
DOT Secretary Ray LaHood said the department’s “concept paper” for resolving the U.S.-Mexico long-haul, cross-border dispute would meet the United States’ obligations under the 1994 North American Free Trade Agreement (NAFTA), while at the same time ensure the safety of products transported across the border.

Under the NAFTA deal, the U.S. and Mexico agreed to permit each other’s trucks to enter the interior of the other country after a phase-in period, expanding the border zone access that had been in place for years.
In 2009, the United States shipped $762 million in pork products to Mexico. Since 1993, the year before the NAFTA was implemented, U.S. pork exports to Mexico have increased by 580 percent, the NPPC said.

But U.S. pork exports to Mexico have dropped by 11 percent since Mexico announced last August that it would place higher tariffs on an estimated $2.4 billion of U.S. goods after they claimed the U.S. Congress failed to renew a pilot program created by the Bush administration in 2007 that let a limited number of Mexican trucking companies haul freight beyond a 25-mile U.S. commercial zone.
In turn, the U.S. didn’t allow Mexican trucks free access to these designated roadways, as called for under the NAFTA and a 2001 NAFTA dispute settlement ruling.

Mexico also added dairy and apples to its initial retaliation list of 89 products after the Obama administration reneged on presenting a proposal for resolving the trucking issue.

Under the Omnibus Appropriations Act of 2009, Congress blocked funding for the Mexican Cross-Border Truck Safety Program, a pilot program which allowed a small number of Mexican trucks to enter the U.S. while operating in international commerce.

Robert Guenther, senior vice president of the United Fresh Produce Assoc. (UFPA), said the DOT plan would be a “positive sign of progress in what has become a significant issue for the produce supply chain.”

“We are pleased that the Department of Transportation has finally released a U.S.–Mexico Cross Border Trucking proposal,” he said. “This has gone on much too long and needs to be rectified as soon as possible.”

Guenther added that the UFPA would be working with members to analyze the impact of the DOT proposal – and in particular discuss with Mexican officials – to see if the proposal meets the United State’s obligations under NAFTA.
“In turn, we will ask the Mexican government to suspend their current trade retaliation efforts that have severely impacted trade of fresh fruits and vegetables with Mexico,” he said.

Colin Woodall, National Cattlemen’s Beef Assoc. (NCBA) vice president of government affairs, said it was critical for all farmers and ranchers – and for the entire U.S. economy – that the U.S.-Mexico trucking dispute be immediately resolved.

“The retaliatory tariffs Mexico has placed on U.S. agricultural exports as a result of this dispute is costing the United States an enormous amount of money and jobs for U.S. workers,” he said. “This is a good first step, but it is of little value if our countries do not move forward to end the dispute as expeditiously as possible.”

But Woodall said this is possible only if “we work on market access and defense.”

“We cannot expect to double exports if we allow disputes like this one to linger rather than seek immediate resolve,” he said. “Mexico has been, and continues to be, an outstanding trading partner for U.S. cattlemen and women. Jeopardizing this trade relationship would be detrimental to the U.S. beef industry.

“We urge the administration to work with the Mexican government to reach a commonsense solution that is in the best interest of job creation and sustainability,” he said. “We encourage members of Congress to proactively support this effort to end the dispute.”

LaHood said a formal proposal – which the general public would have the opportunity to comment on – is expected to be announced in the coming months.