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Dairy Facts 2016

Food Industry Groups Urge Congress to Continue Full NAFTA Implementation

Mar 17, 2008

Food Industry Groups Urge Congress to Continue Full Implementation of NAFTA

Countering a challenge to the full implementation of the North American Free Trade Agreement (NAFTA), 69 food industry companies and trade associations, including IDFA, urged Congress last week to continue to allow Mexican trucks to make deliveries throughout the United States. In a joint letter to U.S. legislators, they warn that restricting access would violate U.S. obligations under the agreement and could provoke Mexico to retaliate.

The group sent the letter in response to legislative attempts to halt the U.S. Department of Transportation's Cross Border Trucking Pilot Program, which was established specifically to pave the way for NAFTA's full implementation. Although program critics cite highway safety as their reason for objecting, the pilot program requires U.S. inspectors to examine and clear all Mexican trucks before they enter the United States.

In addition, a NAFTA dispute-settlement panel unanimously ruled in 2001 that a blanket exclusion of Mexican trucking firms clearly violates U.S. obligations under the agreement. The panel's ruling also allows Mexico to retaliate by imposing tariffs on as much as $2 billion worth of U.S. exports.

"If the pilot trucking program is blocked, we expect Mexico to exercise its right to retaliate," the letter states. "Retaliation of this magnitude could wipe out a broad swath of U.S. exports to Mexico and related U.S. jobs."

U.S. food and agriculture products are particularly vulnerable to retaliation, the group warns, because Mexico's agricultural sector has repeatedly called for restrictions on the import of U.S. farm food products. Mexico is the top export market for many food products, including dairy, and the market continues to expand. Food exports to Mexico have more than tripled in the past 15 years, reaching a value of more than $12 billion last year. Dairy exports to Mexico accounted for $853 million in 2007.

U.S. Transportation Secretary Mary Peters reiterated her confidence in the pilot program last week, saying a rigorous safety inspection plan and trained professionals are in place to ensure that every truck in the program meets U.S. safety standards. She also warned legislators that pulling the plug on the program would cause serious and widespread economic consequences.

"So my message to Congress is clear. If you want to help American businesses thrive, support American agricultural success, and champion American highway safety, then keep on trucking with cross-border shipping," Peters said.

To read the joint letter to Congress, click here.

For more information, contact Helen Medina, IDFA assistant director of international affairs, at or 202-220-3507.

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Posted March 17, 2008

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