Oct 22, 2011
Mexico lifts punitive tariffs on U.S. potato exports

It was announced on Friday that Mexico has lifted trade tariffs it had imposed on U.S. goods in 2009 in retaliation for the termination of a cross-border trucking program between the two countries.

The action comes in response to last week’s approval of the first Mexico-based carrier by the U.S. Department of Transportation (DOT) to participate in the U.S.-Mexico Cross-Border Trucking Pilot Program.

“We are pleased that U.S. potato exports to Mexico are no longer subject to damaging retaliatory tariffs. For too long this unnecessary dispute had been allowed to linger, and the importance of today’s resolution cannot be overstated,” said Justin Dagen, NPC President and owner of Dagen Heritage Farms in Karlstad, Minn.

Today’s action by Mexico is the culmination of a pledge by U.S. President Barack Obama and Mexican President Felipe Calderon to end the trade dispute that has plagued the potato industry for 31 months. Since March 2009, U.S. potato growers have seen revenues from frozen potato exports to Mexico decline by more than $70 million, or nearly 50 percent.

“America’s potato growers can now get back to the business of exporting the highest quality potato products in the world to an important trading partner and ally in Mexico. We are eager to earn back the market share that we have lost over the past 2 ½ years,” Dagen concluded.

The NPC and industry allies aggressively pressed the U.S. government to live up to its trade obligations and find a solution to the dispute since the retaliatory tariffs were imposed. As a coalition of more than 140 trade associations, organizations and companies affected by the retaliatory tariffs, the Alliance to Keep U.S. Jobs proved to be an essential part to ending the dispute. NPC is proud to have served as a co-chair of the Alliance along with the U.S. Chamber of Commerce and the National Association of Manufacturers.

Mexico is the third-largest market for U.S. potatoes. In 2008, the most recent year unaffected by the dispute, U.S. potato growers exported more than $83 million in frozen potatoes to Mexico. In response to Congressional action to prohibit funding for a cross-border trucking pilot program, Mexico levied $2.4 billion in retaliatory tariffs in accordance with an arbitration panel’s decision in 2001. U.S. frozen potatoes were initially subject to a 20 percent tariff level on March 23, 2009. The tariff was reduced on August 17, 2010, when the tariff list was rotated to include other agricultural and manufactured goods.

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