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Mexico

Mexican Pork Producers Pressuring Government To Impede Imports

Mexican pork producers continue to pressure their government, primarily through the legislative branch, to impede imports of pork. Local producers claim their livelihoods are imperiled due to the flood of pork imports coming into Mexico. 

In the first half of 2007, average wholesale prices for pork carcasses in Mexico City were 30 percent lower than in 2006. However, lower prices are the result of increased production, as producers increased hog marketing due to high feed prices, rather than an increase in imports, which are down substantially.

About two weeks ago, pork producers formed a new organization called the National Pork Producers Organization, in part due to the failure of its predecessor organization from stopping imports. It quickly lobbied the Mexican Congress, and on Thursday (Nov. 22), the lower house of the Mexican congress passed a resolution calling on President Felipe Calderon to restrict imports. The resolution has no force of law, but it was signed by the leaders of the three principal political parties in Mexico. It calls for the government to initiate a safeguard action, use a constitutional mechanism to restrict imports, tighten inspection of imports at the border and reject pork that is more than 30 days past slaughter. In addition, USMEF has been told that the Mexico Undersecretary of Economy will soon approach the office of the U.S. Trade Representative to request negotiation of some type of managed trade agreement for pork.

According to Chad Russell, regional director for Mexico and the Dominican Republic, these actions are a continuation of a long term effort by local pork producers to stop or limit imports.  These requests to mitigate imports have occurred before, but fortunately failed. USMEF has taken a number of actions to keep the Mexican market open for the U.S. pork industry. Namely, USMEF has and will continue to meet with key members of the Mexican Congress, has provided important economic information to the Secretariat of Economy (the principal executive branch of government responsible for trade) and Mexican industry partners, and is working collaboratively with Mexican meat associations to better inform key Mexican government decision makers about benefits from and the need to continue imports of pork from the United States.

Several items will make it more difficult for the government to act on this resolution, in addition to the legal requirements imposed by the NAFTA and WTO on the Mexican government for the proposed trade restrictions. Mexican pork production increased 2.5 percent per year from 1990 to 2005 (latest data available), and U.S. exports of pork to Mexico are down 26 percent in volume through August this year. At the same time Mexico has become a small, but growing exporter of pork to high-value markets such as Japan. In addition, the Mexican government is increasingly concerned about inflation, particularly for food. An economic study commissioned by USMEF and set to be published next month estimates a net increase in social welfare of almost $500 million annually due to imports of pork into Mexico since the implementation of NAFTA.

Mexico

Mexican Pork Producers Pressuring Government To Impede Imports

Mexican pork producers continue to pressure their government, primarily through the legislative branch, to impede imports of pork. Local producers claim their livelihoods are imperiled due to the flood of pork imports coming into Mexico. 

In the first half of 2007, average wholesale prices for pork carcasses in Mexico City were 30 percent lower than in 2006. However, lower prices are the result of increased production, as producers increased hog marketing due to high feed prices, rather than an increase in imports, which are down substantially.

About two weeks ago, pork producers formed a new organization called the National Pork Producers Organization, in part due to the failure of its predecessor organization from stopping imports. It quickly lobbied the Mexican Congress, and on Thursday (Nov. 22), the lower house of the Mexican congress passed a resolution calling on President Felipe Calderon to restrict imports. The resolution has no force of law, but it was signed by the leaders of the three principal political parties in Mexico. It calls for the government to initiate a safeguard action, use a constitutional mechanism to restrict imports, tighten inspection of imports at the border and reject pork that is more than 30 days past slaughter. In addition, USMEF has been told that the Mexico Undersecretary of Economy will soon approach the office of the U.S. Trade Representative to request negotiation of some type of managed trade agreement for pork.

According to Chad Russell, regional director for Mexico and the Dominican Republic, these actions are a continuation of a long term effort by local pork producers to stop or limit imports.  These requests to mitigate imports have occurred before, but fortunately failed. USMEF has taken a number of actions to keep the Mexican market open for the U.S. pork industry. Namely, USMEF has and will continue to meet with key members of the Mexican Congress, has provided important economic information to the Secretariat of Economy (the principal executive branch of government responsible for trade) and Mexican industry partners, and is working collaboratively with Mexican meat associations to better inform key Mexican government decision makers about benefits from and the need to continue imports of pork from the United States.

Several items will make it more difficult for the government to act on this resolution, in addition to the legal requirements imposed by the NAFTA and WTO on the Mexican government for the proposed trade restrictions. Mexican pork production increased 2.5 percent per year from 1990 to 2005 (latest data available), and U.S. exports of pork to Mexico are down 26 percent in volume through August this year. At the same time Mexico has become a small, but growing exporter of pork to high-value markets such as Japan. In addition, the Mexican government is increasingly concerned about inflation, particularly for food. An economic study commissioned by USMEF and set to be published next month estimates a net increase in social welfare of almost $500 million annually due to imports of pork into Mexico since the implementation of NAFTA.