U.S., Mexico Mull U.S. Chicken Tariffs

The Associated Press ^ | DECEMBER 30, 2002 | EMILY GERSEMA

[Willie Green]

For education and discussion only. Not for commercial use.

WASHINGTON (AP) — U.S. and Mexican officials are negotiating a continuation and possibly an increase on Mexican tariffs on U.S. chicken exports.

Under the North American Free Trade Agreement, tariffs on nearly 80 agricultural products, including chicken, are slated to be lifted Jan. 1, dropping from 49 percent to zero. Mexican farm groups have warned that unless the tariffs are extended or their government gives them another form of trade protection, their country's chicken industry will crash.

``It's apparent that what they're doing is trying to put in place their own means of protecting themselves against a large surge of poultry imports, come Jan. 1,'' said Jim Sumner, president of the USA Poultry and Egg Export Council.

U.S. companies depend on Mexico as a leading poultry buyer, especially of chicken parts, such as wings and legs. Mexican consumers buy the items because they are cheaper than chicken breast meat, and they often can buy them from U.S. producers for much less than what Mexican producers charge.

The National Chicken Council hopes the two governments agree to extend the tariffs for five more years and raise them to 99 percent for 2003 — the level they were at in 2001. The tariffs would be gradually trimmed by 20 percent per year.

``It's much preferable than going through all these other sorts of things that can be set up as roadblocks,'' said Bill Roenigk, vice president of the National Chicken Council.

The Mexican government has taken steps toward shielding their market against U.S. exports, including by toughening disease-testing restrictions. Mexican farmers also are asking their government to reinstate subsidies to cushion them from bad prices, which would be another trade barrier for the United States.

``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, spokesman for the U.S. Trade Representative.

Some economists speculate that U.S. poultry producers support the tariffs because U.S. poultry giants that own processing plants and raise poultry in Mexico want to shield those operations from any losses.

Tyson and Pilgrim's Pride are two of Mexico's leading producers. They also corporate giants in the United States.

Bruce Babcock, an Iowa State University economics professor, said he also thinks extended tariffs would give Mexico time to prepare its market for more open trading but noted that the country had that chance under NAFTA, which gradually phased out the tariffs.

``The Mexican industry really hasn't restructured itself to get ready,'' Babcock said.

[Free the USA]

http://www.freerepublic.com/perl/bump-list

[templar]

wonder why it's so expensive to raise chickens in Mexico vs. the U.S. They've already got all the cheap labor they can use, less environmentism costs, no OSHA, fewer lawsuits, etc.

[cynicom]

Sock it to the American consummer one more time, bend him over but good. Bush lets the Mexicans in wholesale but keeps our chicken high retail.

[Willie Green]

wonder why it's so expensive to raise chickens in Mexico vs. the U.S.

Economies of scale.
Mexican chickens are still largely raised by small, individual farmers, while in the United States, large scale corporate chicken factories are predominant.

These tariffs are good. "Restructuring" the Mexican industry and lowering tariffs merely means that small Mexican farmers would be forced off the land to migrate North and survive off our social welfare system.

[cynicom]

We are getting rid of unwanted dark meat chicken. We ship thousands of tons of it to Russia each year.

[Willie Green]

We are getting rid of unwanted dark meat chicken.

Wings, thighs and drumsticks are actually quite popular.

[Ben Ficklin]

Contract Growers?

[cynicom]

Tyson says it cannot get rid of the stuff. The Russians prefer the dark meat. Tyson says is better to get something from it to help lower cost of white meat to Americans.

[Ben Ficklin]

Seeing as how I'm a leg and thigh man, the retention of the tariffs will keep my costs lower.

[cynicom]

Ben....

I refuse to be drawn into any such discussion. hehehehehehe

[Ben Ficklin]

Here is some info on poultry exports to Mexico

The same situation exists with corn. Even tho the tariff is in place, the Mexicans are importing from the US since they don't have the capacity to produce enough to satisfy demend.

[Texas_Jarhead]

I understand that it's more expensive because there are many more small operations versus a few gigantic ones - of course that could be way off, just something I read

[Blackyce]

What does this have to do with the American consumer? If anything the American producers(of chickens) are taking a hit. Its the Mexicans who are paying more for their Chicken.