NAFTA

A trucking dispute between Mexico and the U.S. has led Mexico to expand a list of tariffs to 54 American agriculture products worth an estimated $1.7 billion.

The tariffs on American exports come after the U.S. Congress discontinued the U.S.-Mexico Cross-Border Trucking Demonstration Project, a pilot program which allowed up to 100 firms from both countries to transport international cargo across the border without restriction.  In evaluation of the fiscal year 2009 budget, Congress determined there was not adequate funding for the Department of Transportation (DOT) to continue the Demonstration Project. 

Under NAFTA, participating countries must allow free transportation and circulation of goods across North American borders.  When a country does not comply with NAFTA requiriements, the reciporcating country may file a case to correct the infractions. 

The most significant additions to the list are tariffs on pork (5 percent) and sweet corn (15 percent).  States in the Midwest will be hit by these tariffs, in particular.  According to USDA, Mexico ranked second (22 percent) in total exports of pork from the U.S. in 2009.  Retaliation approved by the NAFTA ruling will put a strain on commerce between Mexico and the U.S.  The two countries have worked since NAFTA's inception on Jan. 1, 1994, to strengthen their relationship, particularly through free trade. 

As the second largest export market for U.S. agricultural products, Mexico imposed the tariffs to express urgency in resolving the transportation issues.  Congreee will need to work with the USDA to determine how the U.S. will respond. 

----- By Amanda Hill, Staff Writer for Texas Agriculture, 9-3-2010

Brazil Says No to Foreign Ownership of Farmland

Look for the Brazilian government to tighten restrictions on foreign ownership of farmland.  The Associated Press reports Denise Mantovani, Agrarian Development Ministry spokesperson, confirmed published remarks by Minister Guilherme Cassel who had indicated the Brazilian government did not want foreigners buying agricultural land.   "This is the policy of President Luiz Lula da Silva.  Because of food security, Brazilian lands must remain in Brazilian hands."

Mantovani said 10 million acres of land had been registered by foreigners as of 2008 and that between 2002 and 2008, foreigners had invested $2.43 billion in land purchases.  She indicated current Brazilian law states large rural properties can only be purchased by Brazilian citizens or residents.

"But foreigners often bypass that rule by setting up companies in Brazil, which are controlled abroad, to purchase land," she said.  "This is a foreign company and this is what we want to control.  I am not a xenophobe but our land is finite.  This population grows and demands food."

She did not provide a time line for enacting the new restrictions but indicated representatives from several ministries were preparing a constitutional amendment to further restrict foreign ownership of farmland.  She said the amendment "could include the revoking of land titles already purchased by foreigners." 

Source:  LandOwner, 7-14-10, Vol. 31, Issue 13; excerpt from Texas Agriculture, 9-3-10