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Mexican tariff on California grapes eliminated

Two-year trade dispute resolved

POSTED July 8, 2011 9:08 p.m.

The California Table Grape Commission reported Wednesday that a two-year trade dispute involving grapes between the United States and the Mexican government has been resolved.

Grapes were among 89 products included on Mexico’s retaliation list, and received the highest tariff imposed on any product.

In 2009, the Mexican government increased its tariff on table grapes from zero to 45 percent in retaliation for the U.S. government canceling a pilot program that allowed Mexican trucks to operate in the U.S.

Under the North American Free Trade Agreement (NAFTA) the U.S. is supposed to allow Mexican trucks to enter the U.S. for commercial purposes, but funding was eliminated and Mexico imposed a tariff on grape imports from the U.S.

For Central Valley grape growers Mexico was the second largest export market in 2008 — valued at over $61 million. The increased tariff caused exports to drop by almost 73 percent to a value of $16 million in 2009. Volume decreased from nearly 5.8 million 19-pound boxes in 2008 to 1.7 million in 2009.  

 

“Losing that market was devastating; that’s a lot of grapes that growers had to decide if they are even going to pick it, they had to worry if they even have a customer to sell grapes too,” said Kathleen Nave, president of the California Table Grape Commission. “A lot of money will come back into the economy because this market is opening up again, and prices will be better for grape growers.”

 

In August 2010, Mexico reduced the tariff to 20 percent and shipments increased over the prior year, but did not come close to totals for 2008.

U.S. Transportation Secretary Ray LaHood was in Mexico City for a signing ceremony that ended the Mexico trucking dispute. The result will be a dropping of the existing tariffs by 50 percent as of today, reducing the fresh grape tariff to 10 percent. Once trucking begins, likely to be in August, the tariff will be eliminated completely.

 

“The Obama administration, the U.S. Trade Representative and Secretary LaHood made resolving this dispute a priority,” said Nave. “We are grateful for their hard work on this matter and look forward to resuming normal shipments.”

 

Nave said the commission’s marketing staff will now be able to increase their summer promotional efforts in Mexico, including consumer and retail promotions, in-store sampling and providing point-of-sale materials for key retailers across the country.

 

To contact Jonathan McCorkell, e-mail jmccorkell@turlockjournal.com or call 634-9141 ext. 2015.

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