Mexico Imposes Embargo on Beans from NAFTA Partners to Discourage Contraband from Third Countries

SourceMex Economic News & Analysis on Mexico, March 12, 2003 | Go to article overview

Mexico Imposes Embargo on Beans from NAFTA Partners to Discourage Contraband from Third Countries


The Mexican government's decision to impose an embargo on bean imports earlier this year has brought strong protests from the governments of the US, Canada, and Nicaragua.

President Vicente Fox's administration implemented the embargo on imports of black and pinto beans in late January, primarily as a step to prevent smuggling beans via triangulation. At that time, the Secretaria de Agricultura, Ganaderia, Alimentacion, Pesca y Desarrollo Rural (SAGARPA) said a handful of countries like Peru and China were exporting their beans into Mexico through the US, Canada, and Nicaragua. Mexico charges lower tariffs for bean imports from these countries because of trade agreements.

Mexico is a partner with the US and Canada in the North American Free Trade Agreement (NAFTA) and also has a bilateral agreement with Nicaragua.

This is the second embargo since Fox took office in December 2000. In September 2001, the administration implemented a temporary ban on bean imports to help boost prices for domestic producers (see SourceMex, 2001-10-03).

Fox administration sources said the latest embargo was imposed at the request of Mexican farmers. "We merely responded to a complaint from Mexican producers, who claimed that domestic supplies were expanding because of contraband," said Javier Trujillo Arriaga, director general del Servicio Nacional de Sanidad e Inocuidad y Calidad Agroalimentaria, (SENASICA). SENASICA is a unit of SAGARPA.

Trujillo said the government had legitimate reasons to investigate the complaints from Mexican bean producers. "In the last six months we were seeing a flow of bean varieties not typical of those imported by Mexico," said Trujillo. "This raised some flags among authorities."

Critics call decision "political" maneuver

The embargo was strongly criticized by US and Canadian officials, who said the decision was primarily political. "The restriction caught us by surprise," said Keith Christie, Canada's ambassador to Mexico. "Agriculture Secretary Javier Usabiaga has yet to respond to my request for a clarification."

The embargo will remain in effect for an undetermined period, although Trujillo said the restriction could be lifted as soon as Mexico was satisfied that US, Canadian, and Nicaraguan authorities had taken sufficient steps to address the triangulation problems. "As long as this does not happen, we cannot lift the embargo," said Trujillo. "Our first responsibility is to Mexican producers."

Trujillo took issue with assertions by US officials and other critics that the embargo was a ploy to help Fox appease Mexican producers ahead of this year's congressional and gubernatorial elections. "We signed a free-trade agreement that affects bean producers from the US and Mexico, and not those from China and Peru," said Trujillo.

Still, the timing of the embargo coincides with strong demands from Mexican agriculture organizations that the Fox administration renegotiate the NAFTA agriculture provisions. Many Mexican farmers are concerned that the elimination of tariffs on most US and Canadian agriculture products, effective this year, could spell ruin for the domestic agriculture sector (see SourceMex, 2002-09-04, 2002-12-18).

Ironically, beans are not affected by the market-opening measure. Tariffs on corn, beans, and powdered milk are not due to be eliminated until 2008.

"The administration's public policies should place national priority not only on economic development but also on food self-sufficiency," said Alberto Gomez, a director of the organization El Campo No Aguanta Mas. This group has joined with other organizations to push for renegotiating NAFTA's agriculture sections.

Farm groups seek to totally exempt beans, corn from NAFTA

El Campo No Aguanta has gone as far as to demand that the Fox administration rework the agreement to totally exempt corn and beans from NAFTA provisions, meaning that tariffs would remain in place indefinitely. …

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Mexico Imposes Embargo on Beans from NAFTA Partners to Discourage Contraband from Third Countries
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