Mexican Govt. to Suspend Rotating Tariffs on Imports After U.S. Says Talks to Resume

This story appears in the Jan. 17 print edition of Transport Topics.

The Mexican government, after the U.S. announced it would moving forward with talks to reopen its southern border to truck traffic,  said last week it was suspending the practice of rotating goods subject to punitive tariffs.

Mexico had imposed two rounds of tariffs on a variety of products after the U.S. shut down a pilot program designed to start cross-border trucking operations between the two countries.

Mexican Economy Secretary Bruno Ferrari, in a Jan. 10 press conference in Mexico City, said “as of this moment, we stop that rotating process” with the country’s retaliatory tariffs.

Following the March 2009 decision by the United States to shut down pilot project aimed at opening the border, Mexico initiated tariffs on U.S. goods including frozen potatoes and other agricultural products.

Last year, Mexico changed some of the goods on the list, in a maneuver known as a “carousel” designed to broaden the effect of the tariffs: For example, it added tariffs on pork products and dropped them on frozen potatoes.

Ferrari, according to the Wall Street Journal, said ending the tariff rotation was a “sign on our part showing the goodwill we have,” but said the tariffs won’t come down until the United States has a more concrete plan to reopen the border.

Ron Kirk, U.S. Trade Representative, said at the same press conference that a new program could be “up and running as quickly as within the next four to six months,” the Journal reported.

On Jan. 6, the U.S. Department of Transportation released its concept document for a new border trucking program, one that appears to be similar to the one ended in 2009.

The Mexican government said it was “carefully studying” the proposal, but warned it was “seeking a permanent and satisfactory solution” to the border dispute.

Under a provision of the 1994 North American Free Trade Agreement, Mexican trucks were to have access to U.S. highways, but a series of moratoriums and congressional restrictions have prevented a full opening of the border.

In the United States, reaction to Mexico’s announcement was mixed, with some feeling it did not go far enough, but others seeing it as progress toward reopening the border.

“C.R. England is encouraged by this announcement,” Dave Akers, vice president of C.R. England’s Mexican division, told Transport Topics.

Akers said C.R. England has felt the effects of both rounds of tariffs, so the two recent announcements were “good news to us.”

“To read the Jan. 6 concept document and hear about the secretary of the economy for Mexico immediately respond by freezing any tariff rotation, those were two very good signs,” Akers said.

Sen. Patty Murray (D-Wash.), chairwoman of the Senate Appropriations Committee panel that oversees DOT’s budget, and a vocal critic of the tariffs, urged Mexico to drop the levies.

“This response by the Mexican government is inadequate and deeply unfair to Washington state farmers,” she said in a statement. “The United States put a proposal on the table, and Mexico should have responded by ending all punitive tariffs immediately.”

Rod Nofziger, director of government affairs for the Owner-Operator Independent Drivers Association, said he doubted the United States could live up to Kirk’s proposed timeline.

“If indeed DOT is going to abide by existing law, and they are going to get congressional approval of some sort and they are going to provide the public with an opportunity to comment, it seems like four to six months is a pretty ambitious timeframe,” he said.

OOIDA is one of several groups that have opposed opening the border.

The Associated Press contributed to this report.