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Lack of action by Administration, Congress results in High Tariffs on U.S. Confections exported to Mexico

Contact: Susan Smith
(202) 534-1440

August 20, 2010

Washington, DC - Lack of action by the U.S. government to solve a trade dispute over cross-border trucking has resulted in the immediate imposition of a 20 percent duty on chewing gum and chocolate destined for Mexican households.  Mexico is the second largest export market for U.S. confectionery products.

"Dozens of U.S. gum and chocolate makers large and small will immediately feel the effects of these duties," said Larry Graham, president of the National Confectioners Association.  "Previously confections from the United States crossed the border duty-free under NAFTA.  Now millions of dollars of chocolate and gum exports are at risk - US$45 million worth of U.S. confectionery exports to Mexico are subject to these new prohibitively high taxes."

Graham added his concern that some specialty chocolate candy makers, who have worked hard over the past few years to enter the Mexican market, may not be able to continue their export business due to these retaliatory tariffs. "Overnight that could increase the price of a box of chocolate by 20 percent," Graham said.

NCA will continue to urge the Obama Administration and Congress to find a resolution to the border dispute.  In 2001 a NAFTA dispute settlement panel ruled that excluding Mexican trucks violated U.S. obligations under that trade agreement.  The ruling gave Mexico the right to retaliate against U.S. products.

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