NAFTA AGRICULTURE
FACT SHEET:
Milk Powder
TREATMENT OF TARIFFS:
- Prior to the enactment of the NAFTA, U.S.
and Mexican imports were primarily controlled by
quantitative restrictions. Tariffs were small and were
treated in conjunction with the treatment of quantitative
restrictions.
TREATMENT OF QUANTITATIVE RESTRICTIONS:
U.S. Import Restrictions
- When the NAFTA went into effect, the
United States established an initial tariff-rate quota
(TRQ) of 422 metric tons for imports of milk powder from
Mexico. The TRQ grows at a 3-percent compounded annual
rate over a 10-year transition period. U.S. imports of
milk powder from Mexico within the quota enter duty-free.
- U.S. imports from Mexico in excess of the
quota are assessed a tariff equivalent based on the
tariffication of the previously existing U.S. Section 22
import restrictions on milk powder. The tariff equivalent
was initially equal to $900-$1,100 per metric ton, but
not less than 78-83 percent ad valorem, depending on the
exact type of milk powder. This over-quota tariff is
being phased-out over 10 years. For 1998, the quota
quantity is 475 metric tons.
Mexico's Import Licenses
- When the NAFTA went into effect, Mexico
converted its import licensing regime for milk powder to
a transitional NAFTA TRQ. The TRQ will be in effect for
15 years.
- For the United States, the initial
duty-free quota to the Mexican market was 40,000 metric
tons of whole and skim milk powder. This amount grows at
a 3-percent compounded annual rate over the 15-year
transition period. For 1998, the quota is 45,020 metric
tons.
- U.S. exports to Mexico in excess of the
quota are assessed a higher tariff (based on the
"tariffication" of Mexico's import license)
initially equal to $1,160 per metric ton, but not less
than 139 percent. Over the first 6 years of the
agreement, an aggregate 24 percent of this over-quota
tariff is being eliminated; with the remainder to be
phased out over the rest of the 15-year transition
period. The 1998 over-quota tariff is $928 per metric
ton, but not less than 111.2 percent.
- Mexico and Canada excluded bilateral dairy
trade from liberalization in the NAFTA.
U.S. Milk Powder Trade with
Mexico
Calendar
Year
|
1990
|
1991
|
1992
|
1993
|
1994
|
1995
|
1996
|
Export Value
|
5,086
|
33,476
|
38,106
|
85,291
|
34,289
|
27,668
|
9,349
|
Export Volume
|
3,590
|
19,190
|
24,480
|
48,577
|
20,607
|
13,359
|
5,442
|
Value in $1,000; volume in metric
tons. U.S. imports from Mexico are zero or very small.
 |
Last modified:
Friday, November 18, 2005
|
