Most Mexican Dairy Tariffs Dropped Under NAFTA

USAgNet Editors - 01/07/2003

On January 1, 2003, Mexico and the United States eliminated tariffs on most agricultural goods, including nearly all dairy products, under the terms of the North American Free Trade Agreement (NAFTA). These adjustments were made on schedule according to the 1993 NAFTA arrangement; all agricultural and food products under the pact will gain tariff-free status by 2008. This recent step is good news for U.S. dairy exporters, since Mexico is a net importer. Last year, Mexico's annual dairy consumption totaled more than 30 billion pounds, but its domestic milk production reached only about 21.3 billion pounds - a 30% shortfall. In addition, Mexican consumers have proven that they have a growing appetite for a variety of U.S. dairy products.

"Ten years ago, NAFTA first opened up the important Mexican market to value-added U.S. dairy products, and this new round of tariff reductions will continue that progress," said IDFA Senior Vice President Greg Frazier. "Dairy exports to Mexico are now a diversified mix of products, including cheese, ice cream, whey and lactose. Before NAFTA, it was primarily milk powder and butter. NAFTA has provided an excellent growth opportunity for U.S. dairy processors."

Specifically, Mexico has now eliminated tariffs on most dairy products, including: fresh milk, fresh cheese, processed cheese, hard cheese, yogurt, whey, casein, lactose, condensed milk, evaporated milk and dairy blends. For milk powder, the United States is allowed 52,191 tons duty free, with out-of-quota imports taxed at 58.71%.

Posted Jan 10th

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