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Obama announces deal on Mexican cross-border truck dispute

by Joan Murphy | March 04, 2011

WASHINGTON -- Produce groups hailed President Obama’s announcement that a deal had been struck over the Mexico cross-border trucking dispute, a move that will reduce by half the retaliatory tariffs on more than $2 billion of U.S. goods once the agreement is formally signed.

Produce companies have been pushing for Washington to resolve the trade dispute with Mexico since Congress halted a pilot program in March 2009 that would have allowed Mexican carriers to enter the United States.

During a March 3 press conference, President Obama stood besides visiting Mexico President Felipe Calderón in announcing a deal had been reached.

“I look forward to consulting with Congress and moving forward in a way that strengthens the safety of cross-border trucking, lifts tariffs on billions of dollars of U.S. goods, expands our exports to Mexico, and creates job on both sides of the border,” President Obama said at the press conference.

The joint agreement, the details of which have yet to be released, creates a phased-in program that allows Mexican and U.S. long-haul carriers to engage in cross-border operations. Mexican authorities have agreed to a 50 percent reduction in tariffs once the agreement is formally signed by both nations.

With the stroke of a pen, tariffs that now range from 10 percent to 45 percent on fruits, vegetables and nuts shipped to Mexico would be halved. All the tariffs would be eliminated once Mexican carriers access the United States.

But the details of the agreement have yet to gain final approval. The administration plans to brief Congress and release the agreement for comment in the coming weeks.
Still, the news prompted a swift reaction from produce trade groups.

“Many of our members have been caught in the middle of this dispute over the last two years,” Tom Nassif president and chief executive officer of Western Growers Association, who noted that sales from Arizona and California growers have declined during the two-year stalemate, said in a March 3 press release. “It is in times of economic challenge that barriers to trade should be lifted, not fortified. We urge the governments to finalize this agreement and ask members of Congress to support the resolution.”   

“This is very good news for the U.S. and California apple industry,” Alex Ott, executive director of the California Apple Commission, said in a March 3 press release. “Our markets have suffered over the last couple of years, however, with this agreement we are moving in the right direction to bring back a very important market for the California apple industry.” 

“This is good news for trade between the countries and particularly for those in our industry who have faced the retaliatory tariffs and lost market share in Mexico,” said Kathy Means, vice president of government relations at Produce Marketing Association. “We urge both countries to finalize the agreement as quickly as possible.”