- The Washington Times - Tuesday, December 31, 2002

U.S. poultry producers have offered to continue paying tariffs on exports to Mexico, forgoing rights under a free-trade agreement in order to preserve sales to their third-biggest market.
Mexican agricultural producers have been concerned that a flood of U.S. products will overwhelm the market when tariffs on several goods fall to zero tomorrow under the North American Free Trade Agreement. Poultry producers have been especially concerned because they will lose relatively heavy tariff protection.
U.S. companies have proposed a compromise that would return 2003 tariffs on chicken drumsticks and thighs to last year's level 98.5 percent and reduce the fee to zero over five years.
Other poultry products, such as whole chickens and turkeys, would be tariff-free, said Jim Sumner, president of the U.S.A. Poultry and Egg Export Council, a Stone Mountain, Ga.-based association that represents U.S. producers such as Tyson Foods, Pilgrim's Pride, Perdue Farms and ConAgra Foods.
"We feel that we have a possible solution at hand and we are appreciative of both governments for supporting this effort and think it will be in the best interest of trade for both industries," Mr. Sumner said.
U.S. firms worried that, without a compromise, the Mexican government would erect non-tariff barriers, such as health and sanitary inspections, that could keep out U.S. products and protect domestic companies, Mr. Sumner said.
Mexican farmers have protested to their government and won some subsidies and support from a handful of legislators who have called for NAFTA's renegotiation. The trade deal was being implemented during a 14-year period that started in 1994.
Mexican President Vicente Fox this month refused to renegotiate the trade deal, and U.S. officials were hesitant to reopen the agreement.
"At first we didn't think it stood much of a chance. But we've received support from [the Office of the U.S. Trade Representative] and Mexico's Ministry of Economy, so we're cautiously optimistic that we may be able to put this together," Mr. Sumner said.
A U.S. Trade Representative official yesterday touted the benefits of NAFTA, but said Mexico had options to protect its domestic industry.
"At the urging of our domestic poultry industry, we are discussing with Mexico ways to keep American poultry exports to Mexico at current or improved levels," said Richard Mills, USTR spokesman.
U.S. producers in some sectors have taken advantage of lower agricultural tariffs. Chicken exports increased 88 percent from 1995 through the end of 2001. The United States sent 381 million pounds of chicken valued at $119 million last year, making Mexico the third-largest export market by volume, said a U.S. Agriculture Department report published this month.
U.S.-based producers have been able to ship dark meat, preferred to white meat in Mexico, at costs significantly below those of local producers, the report said.
Mexican producers expect that increase to gain strength if poultry tariffs fall from this year's 49 percent to nothing.
Aside from poultry firms, other Mexican producers have complained about U.S. competition, but tomorrow's drop in tariffs on most products will not be as sharp. Most tariffs have been significantly reduced during NAFTA's phase-in. Only Mexican imports of corn, sugar, dried beans and milk powder are supposed to be protected through 2008.
The United States eliminated tariffs on Mexican poultry products in 1994, but health and sanitary restrictions kept many products out of the country.

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