In a decision announced today, Mexico’s Ministry of the Economy has eliminated anti-dumping duties that have been imposed on imports of U.S. beef for the past ten years. The Ministry's resolution goes into effect tomorrow (Aug. 11, 2010) and eliminates the duties effective April 29, 2010. U.S. beef arriving at Mexico's border starting tomorrow should enter the market duty-free. Companies that have paid duties since April 29 are entitled to a refund of all duties paid.
The U.S. beef industry has been seeking resolution of this issue for many years. With full support from the U.S. Department of Agriculture, the National Cattlemen’s Beef Association (NCBA) and the U.S. Meat Export Federation (USMEF) have led a coalition of U.S. beef industry interests seeking elimination of the duties, which ranged from 3 cents to 29 cents per pound. The duties applied to about half of U.S. beef production, which steared some U.S. companies away from Mexico's market.
“For nearly 10 years, U.S. beef producers via NCBA and USMEF have spent an enormous amount of time, money and effort to resolve this issue with Mexico,” said Steve Foglesong, NCBA president and Illinois cattle producer. “Today’s news is a big win for all segments of the beef industry because throughout these 10 years many exporters, small and large, were locked out of our top export market due to these prohibitive duties.”
"This is a very important development for those who advocate free trade, as this decision very much upholds the spirit and intent of NAFTA," said USMEF Chairman Jim Peterson, a rancher from Buffalo, Mont. "It's been a long time coming, and is a direct result of the cooperative effort of several beef industry interests. I want to particularly thank NCBA for its policy work on this issue and the strong relationship it has developed with all sectors of Mexico's beef industry, which really paid big dividends in this case."
Peterson noted that while Mexico is still the leading destination for U.S. beef exports, it is the only major market that is trailing last year's results. The U.S. Trade Representative’s National Trade Estimate Report on Foreign Trade Barriers has estimated that these duties have caused losses of $100 to $500 million annually because of reduced shipments and altered trade flows. Peterson is confident that elimination of the duties will help the market's performance.
"This levels the playing field for all U.S. products entering Mexico and should certainly help us regain momentum in our No. 1 export market," he said. "The foreign markets are very critical to cattle producers' bottom line right now, so this comes as very welcome news. Both countries will benefit substantially from today's action."
The anti-dumping duties are scheduled to sunset every five years, but could have been continued this year upon a request for review by an interested party. Such a request was filed by the association of Mexican cattle producers (Confederación Nacional de Ganaderos, or CNOG), but the organization later withdrew it.
“In recent years, the interested parties in Mexico have concluded that the duties offer them no advantage," said USMEF Regional Director Chad Russell. "Even before the withdrawal motion by CNOG, other Mexican industry associations had remained neutral or actually favored eliminating the duties. This really shows how far the U.S. industry has come in developing a strong trade relationship with Mexico."