Mexico Anti-dumping Case Takes Positive Turn
Mexico Anti-dumping Case Takes Positive Turn
With full support from the USDA, USMEF has been leading a coalition of U.S. beef industry interests to prepare arguments seeking elimination of anti-dumping duties assessed by Mexico on some U.S. beef exports.
The origin of the anti-dumping duties dates back to 1998, when the Mexican beef industry requested an investigation by Mexico’s Ministry of the Economy into whether U.S. beef was being shipped into the country at less than the cost of production. After examining price data on beef imports and reaching a determination of injury to its beef industry, Mexico began assessing duties on boneless and bone-in muscle cuts. Three major packers and certain product categories are largely exempt from the duties, but they still apply to about half of all U.S. beef exported to Mexico.
The duties are scheduled to sunset after five years, but can be continued upon a request for review by an interested party. Such a request was successful in 2005 and was recently filed again, triggering this year’s review. This week, however, the association of Mexican cattle producers who requested the latest review (Confederación Nacional de Ganaderos, or CNOG) notified the Ministry of the Economy of its decision to withdraw the request.
“CNOG’s request to terminate the review appears to be a very positive development,” said Thad Lively, USMEF senior vice president for trade access. “It is important to keep in mind that the Ministry of the Economy must still act upon the request. The ministry is very likely to agree, however, since CNOG is the organization that requested the review in the first place.”
Lively cautioned that the case is certainly not over, and U.S. interests must continue to participate in the proceeding until it is completed.
“We have been asked by the ministry to respond to CNOG’s request, and we definitely plan to do so,” he said. “Obviously, we support the request and feel it should represent a major step toward elimination of the duties. It’s too early to tell for sure, but this certainly moves the case in a very positive direction.”
In preparation of the filing seeking elimination of the duties, USMEF worked closely with the eight largest U.S. packers whose products are affected.
“Our goal is to successfully argue that if these duties are eliminated, the Mexican beef industry will not be injured,” Lively said. “They are simply not going to see a flood of products coming across the border or a depression of prices for Mexican products.”
Lively also noted that continuation of the duties does not have widespread support in Mexico. Even before the withdrawal of CNOG’s request for review, prospects for eliminating the duties appeared favorable.
“Over the past decade, most of the interested parties in Mexico have concluded that it is not to their advantage to have these duties in place,” he said. “Even before the motion by CNOG, several other Mexican industry associations had decided to either remain neutral or actually come out in favor of eliminating the duties.”
The duties, which have been in place since 2000, range from 3 cents to 29 cents per pound. While these rates are low compared to tariffs assessed in some other global markets, Lively says the impact of the duties should not be underestimated.
“In a market where margins can be pretty thin, these duties are often the difference in whether a company can profitably export to Mexico,” he said. “We have seen most companies whose products are subject to the duties drop out of the market. So these companies will see a positive impact if and when the duties are eliminated.”
The timing of any decision by the Ministry of the Economy remains uncertain, but USMEF will provide more information as it becomes available.
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The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry. It is funded by USDA; the beef, pork, lamb, corn and soybean checkoff programs, as well as its members representing nine industry sectors: beef/veal producing & feeding, pork producing & feeding, lamb producing & feeding, packing & processing, purveying & trading, oilseeds producing, feedgrains producing, farm organizations and supply & service organizations.
For more information, contact Jim Herlihy at jherlihy@usmef.org.
USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law.
Mexico Anti-dumping Case Takes Positive Turn
With full support from the USDA, USMEF has been leading a coalition of U.S. beef industry interests to prepare arguments seeking elimination of anti-dumping duties assessed by Mexico on some U.S. beef exports.
The origin of the anti-dumping duties dates back to 1998, when the Mexican beef industry requested an investigation by Mexico’s Ministry of the Economy into whether U.S. beef was being shipped into the country at less than the cost of production. After examining price data on beef imports and reaching a determination of injury to its beef industry, Mexico began assessing duties on boneless and bone-in muscle cuts. Three major packers and certain product categories are largely exempt from the duties, but they still apply to about half of all U.S. beef exported to Mexico.
The duties are scheduled to sunset after five years, but can be continued upon a request for review by an interested party. Such a request was successful in 2005 and was recently filed again, triggering this year’s review. This week, however, the association of Mexican cattle producers who requested the latest review (Confederación Nacional de Ganaderos, or CNOG) notified the Ministry of the Economy of its decision to withdraw the request.
“CNOG’s request to terminate the review appears to be a very positive development,” said Thad Lively, USMEF senior vice president for trade access. “It is important to keep in mind that the Ministry of the Economy must still act upon the request. The ministry is very likely to agree, however, since CNOG is the organization that requested the review in the first place.”
Lively cautioned that the case is certainly not over, and U.S. interests must continue to participate in the proceeding until it is completed.
“We have been asked by the ministry to respond to CNOG’s request, and we definitely plan to do so,” he said. “Obviously, we support the request and feel it should represent a major step toward elimination of the duties. It’s too early to tell for sure, but this certainly moves the case in a very positive direction.”
In preparation of the filing seeking elimination of the duties, USMEF worked closely with the eight largest U.S. packers whose products are affected.
“Our goal is to successfully argue that if these duties are eliminated, the Mexican beef industry will not be injured,” Lively said. “They are simply not going to see a flood of products coming across the border or a depression of prices for Mexican products.”
Lively also noted that continuation of the duties does not have widespread support in Mexico. Even before the withdrawal of CNOG’s request for review, prospects for eliminating the duties appeared favorable.
“Over the past decade, most of the interested parties in Mexico have concluded that it is not to their advantage to have these duties in place,” he said. “Even before the motion by CNOG, several other Mexican industry associations had decided to either remain neutral or actually come out in favor of eliminating the duties.”
The duties, which have been in place since 2000, range from 3 cents to 29 cents per pound. While these rates are low compared to tariffs assessed in some other global markets, Lively says the impact of the duties should not be underestimated.
“In a market where margins can be pretty thin, these duties are often the difference in whether a company can profitably export to Mexico,” he said. “We have seen most companies whose products are subject to the duties drop out of the market. So these companies will see a positive impact if and when the duties are eliminated.”
The timing of any decision by the Ministry of the Economy remains uncertain, but USMEF will provide more information as it becomes available.
# # #
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry. It is funded by USDA; the beef, pork, lamb, corn and soybean checkoff programs, as well as its members representing nine industry sectors: beef/veal producing & feeding, pork producing & feeding, lamb producing & feeding, packing & processing, purveying & trading, oilseeds producing, feedgrains producing, farm organizations and supply & service organizations.
For more information, contact Jim Herlihy at jherlihy@usmef.org.
USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law.