U.S. and Mexico governments have announced an agreement in principle to provide a path to concluding the nearly two-year dispute of the Cross Border Trucking Pilot Program. In the deal, Mexico would lift 50% of the tariffs when the final agreement is signed by both countries. That could amount to a significant reduction in tariffs affecting fresh produce, which range from 10% to 45% on fruits, vegetables, and nuts shipped to Mexico. Shippers paying a 40% tariff would now pay a 20% tariff, according to the deal. The remaining tariff would be lifted when the first Mexican carrier is authorized under the new program.
“This is welcome news that is long overdue,” said Tom Nassif, president and CEO of Western Growers. “Many of our members have been caught in the middle of this dispute over the last two years. 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.”
The U.S. Apple Association is applauding the deal, as well. “This agreement is good news for the apple industry,” said Nancy Foster, USApple’s president and CEO. “A permanent solution is needed that provides certainty for our long-term trading relationship with Mexico.”
A U.S.-Mexico cross-border trucking pilot program was in effect until March 2009 when it was terminated by the U.S. Congress at the urging of organized labor. As a result, the U.S. was in violation of its obligations under the North American Free Trade Agreement (NAFTA). Consequently, Mexico exercised its NAFTA rights to impose retaliatory tariffs on $2.4 billion worth of U.S. manufactured and agricultural exports.