US confectioners urge Mexican border dispute resolution

23-Aug-2010 - Last updated on 24-Aug-2010 at 09:53 GMT

A new 20 percent tariff on American chocolate and gum being shipped into Mexico has prompted an outcry from US confectioners, as the Mexican government has introduced a raft of new tariffs on American products.

The tariffs, which range from five to 25 percent, have been introduced as a result of an ongoing cross-border trucking dispute between the US and Mexico. In 1995, the US and Mexico, under the North American Free Trade Agreement (NAFTA), agreed to lift barriers on trucking goods from Mexico to the United States.

However, under pressure from labor groups citing environmental, road safety and competition concerns, the US has continued to block Mexican cargo trucks from crossing the border. President Obama said in August last year that he was committed to finding a solution.

Last year the Mexican government applied tariffs to 89 US products in an effort to put pressure on Washington to honor its NAFTA obligations, and this latest move adds ten more, bringing the total to 99 US goods, including chocolate and gum.

President of the National Confectioners Association Larry Graham said: “Previously confections from the United States crossed the border duty-free under NAFTA. Now millions of dollars of chocolate and gum exports are at risk – US$45 million worth of US confectionery exports to Mexico are subject to these new prohibitively high taxes."

Other food items affected by the new tariffs include ketchup, cheeses, sweetcorn and pork products. The latter is especially significant as Mexico represents the United States’ largest export market by volume for pork products.

President of the National Pork Producers Council Sam Carney said: “We are extremely disappointed that our top volume export market has taken this action, but we’re more disappointed that the United States is not living up to its trade obligations…Our trading partners need assurance that the United States will live up to its trade obligations.”

US trade representative Ron Kirk said in a statement that the government is working to resolve the issue “in a way that addresses safety concerns” while upholding trade obligations.

He said: “Mexico is an important US export market and President Obama understands the economic pain that these tariffs cause for American farmers, companies and workers.”

In 2001, Mexico took the issue to a dispute resolution panel, which recommended that the US comply with the NAFTA accord and allow Mexican trucks to cross the border.

Tariffs imposed last year affected a range of fruits, vegetables, nuts, seeds, juices, soups and sauces.