WASHINGTON -- The produce industry welcomed news that Mexico formally lifted tariffs that have amounted to more than $900 million of U.S. agricultural products since 2009, settling a costly dispute over a Mexican trucking pilot program.
Mexico, the third-largest trading partner for the United States, imposed the tariffs after years of squabbling over a provision in the North American Free Trade Agreement that allowed Mexican long-haul trucks to enter U.S. highways in 2000. Congress blocked funding for the program, which set off a political dispute between the two countries.
Top U.S. and Mexican officials negotiated the agreement this summer, but it wasn't until Oct. 21 that embassy officials celebrated the first truck crossing at the World Trade Bridge in Nuevo Laredo, Tamaulipas, and the tariffs officially were dropped to zero.
"Increased U.S.-Mexico trade is a win for North American competitiveness, a point that should not be forgotten in an ever-competitive global economy," Anthony Wayne, U.S. ambassador to Mexico, said at the Oct. 21 press event in Mexico.
The Transportes Olympic truck made the first crossing at 2 p.m., en route to Garland, TX, according to the U.S. embassy. The pilot program allows approved Mexican motor carriers to operate throughout the United States for up to three years, and U.S. motor carriers to operate throughout Mexico for the same time period.
"With this program there is no doubt that commercial operational logistic efficiencies along our extensive border will improve and the commercial exchange and productivity between our two countries will increase, as well as the competitiveness of North America in the global context," Mexico's secretary of communications and transportation, Dionisio Pérez Jácome, said at the ceremony.
For companies stung by the Mexican tariffs, the news is bittersweet.
"For our members with cherries, pears, apricots and most especially fresh grapes, the announcement was one of satisfaction and gratitude that we were once again returning to the zero tariff as intended under the terms of the North American Free Trade Agreement," Barry Bedwell, president of the California Grape & Tree Fruit League, based in Fresno, said in a statement. "After approximately two-and-a-half years seeing shipments to Mexico materially reduced, particularly for fresh grapes, which dropped as much as 70 percent between 2008 and 2009, we are relieved to see that the United States did the right thing."
Northwest pear growers said that the timing couldn't be more perfect.
"We estimate $30 [million] to $35 million in lost sales or depressed prices over the two plus years," said Jeff Correa, international marketing manager at the Pear Bureau Northwest, based in Milwaukie, OR.
Mexico amounts to half of total exports for the pear industry, and pear growers have a larger crop this year and are anticipating a 20-25 percent price increase, Mr. Correa said.
Bryan Silbermann, president and chief executive officer of the Produce Marketing Association, said that the tariffs can be especially damaging in the current economic slowdown.
"As PMA members represent a global supply chain, tariffs of a retaliatory nature, no matter what the intention, only damage trade and ultimately hurt job growth in challenging economic times," said Mr. Silbermann.
But Mr. Bedwell said that the celebration should be met with some caution.
"However, we must remain continually vigilant against those special interests that will possibly attempt to unwind this agreement," he said. "In the meantime, we look forward to increasing our export levels to those numbers and higher which we had prior to the tariffs being implemented."