WASHINGTON, D.C. - Outlining the need to regain full duty-free access to the U.S. dairy industry's largest export market, IDFA strongly supports the proposed cross-border trucking agreement between the United States and Mexico developed by the U.S. Department of Transportation (DOT). The proposal addresses safety concerns and U.S. compliance with trade obligations to Mexico that will allow the two countries to fulfill their respective obligations under the North American Free Trade Agreement (NAFTA).

"This is an important step toward a solution that will put an end to the retaliation against our industry's products," said Clay Hough, IDFA senior group vice president and general counsel. "Not only will this resolve a long-standing dispute, but the agreement will send a clear signal to trading partners that the United States is serious about the reciprocal fulfillment of trade obligations."

Last year Mexico imported over $837 million of U.S. dairy products, which was more than double the value of U.S. dairy exports to the industry's second largest export market. However, since tariffs on several American cheeses were added to Mexico's retaliation list last August, exports of the targeted cheeses have been down 60 percent through February of this year.

In written comments to the U.S. Department of Transportation, IDFA stressed the importance of avoiding problems that surfaced in the past and finding a permanent solution.

"The current dispute began in 2009, when Congress passed an appropriations bill that eliminated the funding for the previous cross-border trucking pilot program with Mexico," said Hough. "Now several legislators have expressed their opposition to this new proposal and have threatened to stop it when the relevant appropriations legislation will be considered by Congress early this summer."

To ensure that the tariffs are terminated permanently, the Mexican trucks must receive permanent authority to operate within the United States. This will require implementing a long-term cross-border trucking program after the pilot program ends. "We urge Congress to support a permanent resolution of this issue, which is important to maintain a critical market for U.S. dairy exports," said Hough.

Under the terms of the DOT proposal, Mexico and the United States have agreed that 50 percent of the retaliatory tariffs currently in place will be suspended when the agreement is signed. The remaining 50 percent will be suspended when the first Mexican carrier is authorized to operate under the pilot program.

Read IDFA's written comments on DOT's "Pilot Program on NAFTA Long-Haul Trucking Provisions."

The International Dairy Foods Association (IDFA), Washington, DC, represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies representing a $110-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA).

IDFA's 220 dairy processing members run more than 600 plant operations, and range from large multi-national organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States.

SOURCE: IDFA