Mexican Beef Growers Decry Duties on U.S. as Too Low

Leaders of Mexico’s beef industry complained Tuesday that anti-dumping duties imposed by their government on U.S. beef imports fall far short of the measures needed to keep a torrent of U.S. meat products from devastating the Mexican cattle industry.

Mexican beef growers are fearful that the duties imposed this week could actually result in more U.S. beef imports, which have increased by 490% since 1995.

The issue has been a source of growing tension in Mexico, with the beef industry contending that U.S. imports have thrown 440,000 people out of work in the last four years. The $4.6-billion cattle industry is a crucial source of employment in the Mexican countryside.

The rise in beef imports began soon after the North American Free Trade Agreement took effect in January 1994. The NAFTA accord immediately ended tariffs on beef products moving across the border.

A preliminary ruling by Mexico’s Commerce Ministry on Monday found that U.S. imports had damaged Mexican producers by unfairly selling at below cost products ranging from choice boneless cuts to uncut sides of beef, liver and tripe.

Efrain Resendiz Patino, financial director for Grupo Viz, a Mexican beef industry leader in the northern state of Sinaloa, said U.S. firms were mostly dumping low-priced cuts for which there is less demand in the United States.

These “unfair U.S. practices” have prevented Grupo Viz from growing as much as it should have since 1995, he said, but many less well-financed beef producers have failed outright.

“The water is up to our necks, but many others have already drowned” in the flood of U.S. beef imports, Resendiz added.

In Washington, the U.S. trade representative’s office expressed concern about the duties and said it would study the tariffs issue carefully. And the National Cattlemen’s Beef Assn. complained that the tariffs “would levy substantially larger duties on smaller U.S. processing plants, in addition to distorting trade patterns and adding costs.”

The U.S. exporters have until mid-September to challenge the duties.

The Mexican ruling exempted or assigned far lower tariffs to products of the four largest U.S. producers, which cooperated with the government’s inquiry, compared with tariffs imposed on other American beef importers. The four firms, Excel Corp., IBP Inc., ConAgra Inc. and Farmland National Beef Packing Co., account for nearly half the U.S. beef imports into Mexico, which have soared from 5% of annual consumption in 1995 to 33% last year--worth $452 million.

For the four favored companies, import duties won’t exceed 7.6%, while other importers will have to pay duties of up to 75% for the most heavily traded products: beef sides and choice cuts. The ruling also imposed much higher duties--up to 215%--on imports of tongue, liver and tripe, but those products account for only a fraction of the total U.S. beef imports.

The top four U.S. companies alone produce a total of 9 million tons of beef, or nearly 10 times the 940,000 tons of beef produced in Mexico last year, said Enrique Lopez Lopez, executive director of the Mexican Assn. of Cattle Fatteners.

Mexico buys $600 million worth of U.S. beef a year, accounting for 16% of U.S. beef exports. Meanwhile, Mexico exports about 86,000 tons of beef, mostly to the U.S. Mexican beef production has fallen 21% since 1995.