Mexican Frozen Potato Tariff for US Products Reduced but Not Eliminated

Earlier this week, the government of Mexico announced that it has changed its retaliatory tariff schedule for US products that has been in place since March 2009. Under the new schedule, frozen potato products are now subject to a five percent tariff instead of the 20 percent tariff originally applied by Mexico as a retaliatory measure.

A North American Free Trade Agreement (NAFTA) dispute panel ruled in 2001 that the U.S. was failing to live up to its obligations under the agreement and that Mexico was within its legalright to institute trade penalties. The Mexican government waited until Congress voted to terminate theCross-Border Trucking Pilot Program in 2009 before implementing tariffs ranging from 5 to 40 percent on $2.4 billion in U.S. exports.

While the new tariff schedule is less damaging to potato growers, Canadian producers and processors still have duty-free access to the Mexican market, leaving U.S. potato growers at a continued disadvantage. The revised retaliation adds tariffs for agriculture products including apples, cheese, pistachios, pork and ketchup. Additionally, some manufactured products were included and will seeexports to Mexico reduced as a result of the failure to resolve this trade dispute.

The NPC will continue to be an active participant and co-chair of the Alliance to Keep U.S. Jobs, a coalition formed specifically for the purpose of finding a resolution to the current Mexican trucking issue.