Government Affairs

MEXICO ALMOND MARKET UNDER PRESSURE

AS PART OF THE APPROPRIATIONS BILL signed by President Obama in March, funding of a cross-border trucking pilot program with Mexico was canceled. The program was implemented under the Bush administration to comply with cross-border trucking provisions that were incorporated in the original NAFTA agreement.

Failure of the U.S. to implement the provisions led to a successful dispute settlement challenge by Mexico in 2001; the pilot program was introduced in an effort to stave off retaliation by Mexico. In response to the cancellation, Mexico on March 19 imposed higher tariffs on a wide range of U.S. exports worth $2.4 billion. Almonds (shelled and prepared/preserved) are on the list with a tariff rate of 20%!

Handlers are already reporting effects from the cancellation. President Obama visited Mexico in mid-April to discuss trade agreements and other issues. The Mexican ambassador to the U.S. indicated that Mexican authorities are "willing to continue working cooperatively to find a solution that ensures the United States complies with its NAFTA obligations."

A number of trade groups are weighing in, urging the U.S. administration to quickly find a resolution that will honor obligations under NAFTA, eliminating any cause for Mexico to halt U.S. trade.