Mexican Government Ruling On Compliance With NAFTA Panel Ruling Will Benefit Only Carcass Exports But Will Eliminate 30-Day Rule...

The Mexican government reportedly will publish this week a 95-page ruling on how it intends to comply with a report issued in March by a binational North American Free Trade Agreement (NAFTA) panel on Mexico’s antidumping case against U.S. beef.

As it stands, the U.S. Meat Export Federation (USMEF) concludes, the ruling will have little tangible effect on U.S. beef exports to Mexico. Although details are unconfirmed, sources tell USMEF the ruling will:

• Eliminate duties on exports of U.S. beef carcasses (in 2003 the U.S. exported only 1,899 metric tons of beef carcasses to Mexico);
• Remove the requirement that U.S. beef can only be exported to Mexico within 30 days of slaughter;
• Allow U.S. beef companies to resume exporting ungraded beef to Mexico, although they will have to pay the duties previously assigned to them by the Mexican government;
• Recognize name changes of several U.S. companies, allowing them to export to Mexico under their new names and pay the duties previously assigned by the Mexican government instead of the $0.63 per kilogram assigned to all U.S. companies which didn’t receive specific duty rates; and
• Confirm the imposition of antidumping duties on both bone-in and boneless products.

“We’re disappointed that despite NAFTA these duties remain in place,” commented USMEF Vice President, Trade Development Richard Fritz. “We believe the U.S.-Mexican border should be a shining example of free trade.”

The ruling will be enforced after being published in the Mexican government’s Diario Oficial, probably this week.

USMEF is advising individual companies that have been assessed an antidumping duty to closely examine the official notice to determine whether or not they wish to appeal and on what grounds an appeal could be based.

The Mexican government report was in response to an 83-page decision in Mexico’s antidumping case against U.S. beef released on March 16 by a binational NAFTA panel. Mexico imposed antidumping duties on U.S. beef in April 2000 and amended its antidumping and countervailing duty laws in December 2002.

Under international trade laws, one country accuses another of “dumping” when it believes products are being imported below their cost or home-market price and the country believes its own producers are being injured by those imports.

The U.S. beef industry challenged Mexico’s antidumping measure on beef under Chapter Nineteen of NAFTA. The NAFTA case addressed whether the Mexican determination is consistent with the legal requirements of Mexico’s antidumping law.

In the first eight months of 2004, the latest available figures, Mexico was the leading export destination for U.S. beef. The U.S. exported 102,748 metric tons of beef and beef variety meat products valued at $298.2 million. Exports to Mexico are far less than prior years because Mexico is currently accepting only boneless beef from animals less than 30 months of age and produced under an approved Agricultural Marketing Service (AMS) Beef Export Verification (BEV) program.

The U.S. Meat Export Federation is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn, sorghum and soybean checkoff programs.

– USMEF –