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Hard-hit commodities urge Obama to resolve Mexican trucking dispute

by Joan Murphy | April 19, 2009
WASHINGTON -- U.S. exporters are hoping for a quick resolution to a trucking dispute with Mexico that has resulted in retaliatory tariffs affecting $900 million in U.S. agricultural products, but they don't expect the issue to be resolved during President Obama's trip to Mexico the week of April 13.

Congress ditched the two-year-old pilot program in a 2009 appropriations bill last month that would have continued to allow some Mexican truckers to operate deeper in the United States. But Mexican officials said that this latest move violates bilateral trade agreements and that their trucks have a proven safe record on U.S. roads.

Now U.S. businesses are feeling the pain.

"It's critical for it to get resolved," said Cathleen Enright of Western Growers Association. "Our farmers are facing substantial challenges in California," including a tightening credit market and water shortages. The 45 percent tariff on grapes "could close that market" at a loss of $58 million and 50,000 jobs, she said. The 20 percent tariff on the potato market means another hard-hit commodity will feel the pain.

Some 150 agriculture, manufacturing, retail and other businesses sent a letter to President Obama April 7, urging the administration to work "expeditiously" to resolve the trade dispute after the Mexican government slapped retaliatory tariffs on $2.4 billion worth of U.S.-manufactured goods and agricultural exports.

"Over $1.5 billion in U.S.-manufactured products and $900 million in U.S. agricultural products are impacted by the retaliatory tariffs," the letter said. "The retaliation puts over 12,000 agricultural and 14,000 manufacturing jobs at risk."

"The retaliation measures have the potential to shut out the targeted U.S. products, providing an opportunity for our foreign competitors to fill that void and establish themselves as the significant suppliers to Mexico," said the letter, which was signed by scores of produce industry associations, including the American Peanut Council, California Pear Advisory Board, Georgia Fruit & Vegetable Growers Association, Western Growers Association and the Produce Marketing Association.

But the issue is not likely to be resolved quickly, and Western Growers Association is trying to educate members of Congress on the truck pilot program and the devastating impact the tariffs are having on commodities. Another danger is that Mexico could rotate the tariffs by taking some items off the list and replacing them with new items -- a move that would make the market even more unstable, she warned.

"Until this issue is resolved, Mexico's retaliation will continue to economically harm U.S. farmers, manufacturers and service providers, and those who work in these industries," the letter concluded. "This is something our country cannot afford."