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GOVERNMENT OF MEXICO ANNOUNCES TEMPORARY TARIFFS ON BEEF IMPORTS

GOVERNMENT OF MEXICO ANNOUNCES TEMPORARY TARIFFS ON BEEF IMPORTS
 WASHINGTON, Nov. 11 /PRNewswire/ -- The Embassy of Mexico issued the following:
 Due to a dramatic increase of beef imports which has resulted in severe damage to the domestic beef market, the government of Mexico has announced imposition of temporary tariffs on imports of live cattle, carcasses and cuts which are within Mexico's GATT bounded rates. This emergency action will become effective on Thursday, Nov. 12.
 This action is a result of a substantial increase of beef imports into Mexico in the past months which have created severe downward pressure on prices, and the buildup of large inventories of both cattle and meat. The two factors that mainly account for the increase in imports are the recent fall of international prices and subsidies granted abroad to the cattle raising sector in most developed countries.
 Due to this phenomenon, Mexican imports of live cattle, carcasses and cuts have increased a dramatic 513 percent in volume terms and 718 percent in value terms between January of 1989 and July of 1992.
 The excess supply in the domestic market resulting from this sharp increase of imports caused the prices paid to cattle-raisers in Mexico to fall by 37 percent in real terms between January 1990 and September 1992.
 Clearly, these imports have caused injury to the Mexican livestock sector. Domestic production has lost share in the internal market, while imports have increased five times their share in domestic consumption from 1989 to the first semester of 1992.
 As a result of the sharp increase in imports, 400,000 head of cattle have not been able to be slaughtered and remain in the fattening pens, which has ensued in extremely high costs. Thus, capacity utilization in the fattening industry has fallen 52 percent between 1989 and 1992. In 1992 the slaughter capacity will only reach a utilization level of 35 percent.
 Given this alarming situation, provoked by a fall in the world price and a misfortunate conjunction of events, the Mexican government has deemed it necessary to raise, temporarily, the protecting levels for the livestock sector (Bovine). These emergency actions will become effective on Nov. 12.
 If this measure were not taken, the domestic livestock industry would have faced a drastic and unjustified downscaling of its activities.
 However, it is important to point out that Mexico maintains its strong commitment to free trade and that the access of exporters to the Mexican market will remain open in the sense that alternatives of establishing quantitative restrictions will not be imposed, preserving the competitive nature of the domestic beef market.
 The Mexican government emphasizes its commitment to trade liberalization, a commitment that has been clearly established by Mexican actions in GATT and in the recently concluded free trade agreement negotiations with the United States and Canada. This action is an isolated event, temporary in nature, and in no way should be generalized or used to imply or infer that Mexico is adopting protectionist trade measures. These emergency measures are not aimed at protecting inefficient producers; in fact, their purpose is exactly the opposite: to stabilize the domestic beef market in order that efficient producers, be they domestic or foreign, may continue with their normal activities in what continues to be an extremely competitive environment.
 Livestock Sector Import Tariffs In Force By Nov. 12, 1992
 Tariff Item Description Tariff
 0102.90.03 Live cattle 15 percent
 0102.90.99 Other livestock animals (bovine) 15 percent
 0201.10.01 Fresh carcasses or half carcasses 20 percent
 0201.20.99 Fresh bone-in beef cuts 20 percent
 0201.30.01 Fresh, boneless beef 20 percent
 0202.10.01 Frozen carcasses or half carcasses 25 percent
 0202.20.99 Other frozen bone-in beef cuts 25 percent
 0202.30.01 Frozen, boneless beef 25 percent
 -0- 11/11/92
 /CONTACT: Javier Trevino or Antonio Ocaranza of the Embassy of Mexico, 202-728-1655/ CO: Embassy of Mexico ST: District of Columbia IN: SU:


IH -- DC018 -- 9946 11/11/92 18:26 EST
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Date:Nov 11, 1992
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