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Restrictions on Mexican agricultural products could lead to a trade war with the United States

Legislators, exporters, and importers are debating the impact that the United States' intention to restrict imports of Mexican agricultural products could have, as this measure could even lead to a trade war.

In a second hearing organized on Thursday, August 20 by the administration of President Donald Trump, US legislators and representatives of agricultural organizations from the country's southern states defended the measure, stating that American farmers have been affected by imports from Mexico. Legislator Austin Scott, from Georgia, stated that Mexico's subsidy programs for fruits and vegetables have caused losses to US farmers, and even accused the Central American country of dumping those products.

On the other hand, the Fresh Produce Association of the Americas (FPAA), which represents US fruit and vegetable importers, opposes the United States resorting to the application of Section 301 of the Trade Act of 1974, which allows the United States Trade Representation (USTR), under the direction of the President, to suspend trade agreement concessions or impose import restrictions if it determines that a foreign country's act, policy or practice violates or is inconsistent with the provisions of any trade agreement, or is unjustifiable and restricts United States trade.

"This trade law would impose costly tariffs on seasonal products, raise consumer prices, and launch numerous, never-ending trade wars that could jeopardize more than $ 40 billion in US agricultural exports to Mexico," the association stated.

According to the association, the United States and Mexico agreed not to exceed certain levels of agricultural subsidies, and, so far, both parties have fulfilled that commitment. In fact, according to a recent analysis by the University of Arizona, since 1995 the United States has used up to 41% of its allowable subsidies, while Mexico has averaged just 2%. The analysis did not include the recent $ 28 billion aid to US farmers in light of ongoing US trade tensions with major export markets, including China, which could push the country over the limits allowed by the World Trade Organization (WTO) for trade subsidies.

Asked if Mexico had an unfair labor advantage, the FPAA stated that one of the key points negotiated in the Agreement between Mexico, the United States, and Canada (T-MEC) was labor responsibility. The association stated that Mexico had changed its law and that the T-MEC contains dispute resolution mechanisms for labor provisions.

 

Source: eleconomista.com.mx 


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