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Group aligns against Mexico tariffs
Thursday, 30 July 2009 00:00

A group of more than 150 companies and organizations affected by trade tariffs with Mexico is awaiting a meeting with transportation secretary Ray LaHood.

The group, chaired by the Washington, D.C.-based National Potato Council, announced its official name late July: Alliance to Keep U.S. Jobs.

Mexico reinstated the pre-North American Free Trade Agreement tariffs in direct retaliation to Congress' move to stop funding the Department of Transportation's Cross Border Trucking Pilot Program. In response to the tariffs, President Obama ordered the Department of Transportation, the Office of the U.S. Trade Representative and the State Department to come up with a new plan that would appease Mexico, as well as address the safety concerns of Congress.

“Due to all of the legislation, the health care, appropriations and food safety, they’re (Congress) probably not going to get to this until fall,” said Meghan Kolassa, director of government affairs for the National Potato Council.

LaHood addressed the issue May 21 at the National Press Club and said the White House was vetting a proposal.

“We’re kind of still in that holding pattern,” Kolassa said.

Meanwhile, the group already met with the Federal Motor Carrier Safety Administration, a division of the Department of Transportation, and put in a request to meet with LaHood. The Department of Transportation is the lead agency on the issue.

Kolassa said representative groups from the apricot, apple, cherry, fig, grape, strawberry and tomato industries are part of the alliance, as well as regional and state groups like the Georgia Fruit & Vegetable Growers Association.

In the potato industry, shipments of frozen potato products from the U.S., which were hit with a 10% tariff in March, are down 29%. Canada’s frozen potato exports to Mexico are up 33%, Kolassa said.

There is potential for that overflow to carry into the fresh side, causing an oversupply.

“It’s less likely this year because buyers are under contract, but next year, we don’t know what the trickle down effect will be,” Kolassa said.

The tariffs also cut pear shipments to Mexico down by a third as of late June.

If the tariff issues aren’t resolved by fall, grapes and strawberries will join the list of commodities affected by difficult business with Mexico.

The Mexican government said it wants a plan similar to the one that was cut in order to drop the tariffs. U.S. groups like the teamsters union argue that safety concerns should keep Mexican trucks off U.S. highways., 7/30/2009