The Mexican government announced June 5 that it would take action against U.S. rice imports. The action, according to documents published in the “Diario Oficial” (Mexican Federal Register) was in response to findings in an investigation into commodity dumping by U.S. companies.
On Dec. 11, 2000, the Mexican Secretariat of Economy (SE) began an anti-dumping case against imports of U.S. long grain white rice. In October 1999, the Mexican Rice Council — representing producers and millers in the country — prodded the Mexican government to action by filing a petition asking that the matter be looked into.
Included in the official findings was the following: “(The Mexican Rice Council) alleged and SE determined that indications of price discrimination existed and that said price discrimination allowed U.S. exporters to decrease the price of long grain white rice exported to Mexico during the period March-August 1999. Likewise, SE determined that the combination of both the above situations caused a decrease in price of long grain white rice produced domestically, which in turn provoked a decrease in farmers' income. Finally, SE determined that the decrease in income to the sector producing long grain white rice constitutes damage caused by conditions of price discrimination on imports of long grain white rice from the United States.”
As a result of the findings, Mexican officials placed a 10.18 percent anti-dumping duty on all but three U.S. milled long grain rice exporters. Mexico enacted the duty despite uncovering just one company that had dumped rice. The tariff will remain in place for five years.
Many of the companies affected by Mexico's ruling haven't sold rice to the country in the past. Considering the two countries are NAFTA partners, the news didn't sit well with those in the U.S. rice industry and politicians.
Politicians and industry leaders claim the Mexican anti-dumping actions are politically motivated. For months, the country's leadership has been consistent in its complaints about the new U.S. farm bill.
On July 18, U.S. Rep. Marion Berry — whose constituents include many rice farmers in east Arkansas — sent a letter to the White House expressing frustration with what he perceived as a lack of leadership on the issue.
“I have to admit to being a little frustrated that the administration claims to want trade promotion authority, but it can't even work out a fair trading agreement between American rice producers and a NAFTA trading partner. This episode illustrates why I would be reluctant to support a trade promotion authority for this administration, if it comes out of conference committee,” says Berry.
In his letter to the White House, Berry said, “Attacks on American agriculture such as this cannot be allowed in this time of depressed farm prices and economic uncertainty. I urge you to stand up for American rice farmers and stop this patently unfair and politically motivated decision.”