The Produce Marketing Association (PMA), the United Fresh Produce Association and the American Frozen Food Institute (AFFI) are among the groups applauding the proposed resolution of a two-year-long dispute over cross-border trucking services between the U.S. and Mexico.
A Memorandum of Understanding was signed July 6.
The food groups believe the new agreements will bolster the trade for fresh fruits and vegetables since the tariffs imposed on U.S. produce and other products shipped to Mexico would be cut in half. The rest of the tariffs would fall away as soon as the first shipment from Mexico is given clearance at the American border.
“This dispute has had a profound impact on the fresh produce industry in particular,” said Bryan Silbermann, president and CEO of PMA. “Mexico is a critical trading partner for our members and the resolution of this issue not only allows for greater export opportunities, but also impacts job creation and demand for produce in both countries.”
The tariffs were put in place as retaliation to the U.S. government’s termination of a pilot trucking program. The tariffs were applied to more than $900 million of U.S. agricultural products, creating an immediate drop in sales of many produce commodities to the Mexican market, according to PMA, which added that there is growing demand in Mexico for fresh produce.
United Fresh’s director of government relations, Julie Manes, said, “This accord is fantastic news for the produce industry, and we are excited to see more trade with Mexico, which provides such a valuable market for American produce. United Fresh recognizes and applauds the work of the Department of Transportation and the office of the U.S. Trade Representative for their dedication in pursuing a workable, expedited solution to this standoff that has lingered for too long. As part of the Alliance to Keep U.S. Jobs, we’ve worked hand in hand with our partners in the industry and in Washington to provide feedback and inside on this issue and we are very happy that the end is close in sight.”
Added AFFI president and CEO Kraig R. Naasz: “AFFI has long endeavored to help find a solution to the U.S.-Mexico trucking dispute that has inflicted heavy economic losses on U.S. exporters of frozen potato products, frozen sweet corn and frozen ham.
“The memorandum ensures the U.S. will be in full compliance with its international trade commitments and will immediately help restore some of the lost jobs and lost market access U.S. frozen food producers have suffered.”
The solution is a reciprocal, phased-in program that permits Mexican and U.S. long-haul carriers to engage in cross-border operations under the North American Free Trade Agreement.
AFFI noted that Mexico imposed a 20 percent tariff on U.S. frozen potato products in 2009 after the U.S. canceled a cross-border trucking pilot program, costing U.S. frozen potato product exporters more than $33 million in lost revenue. Though that tariff was reduced to 5 percent in August 2010, Mexico expanded its tariff retaliation list to include imports of U.S. frozen sweet corn and frozen ham.