As more and more countries reduce or eliminate tariffs, cross-border
trade generally increases, but other factors can still affect the
flow of goods. In the livestock and meat industry, for example,
trade can be influenced by differences in animal health and sanitary
regulations. The recent elimination of poultry tariffs between the
U.S. and Mexico through the North
American Free Trade Agreement highlights the potential impact
of such differences.
In many ways, the two countries are ideal trading partners in poultry,
and each stands to benefit from the relationship. They share a border,
Mexico has a rising middle class, and Mexican and American poultry
tastes are complementary—Mexican consumers generally prefer
dark meat, while American consumers prefer white meat. Price differences
for dark and white meat between Mexico and the U.S. could result
in profitable trade for both countries.
Both countries are concerned, however, about the spread of contagious
diseases, such as Exotic Newcastle disease (END), and have established
sanitary regulations to minimize the risk of transmission of such
diseases. In the U.S., two USDA agencies—the Animal and Plant
Health Inspection Service (APHIS) and the Food Safety and Inspection
Service (FSIS)—establish and administer sanitary standards
that other countries must meet in order to export to the U.S. The
standards for cooked meat differ from those for fresh, chilled,
and frozen meat. Mexico already ships cooked poultry meat to the
U.S. In addition, two Mexican states are recognized as low-risk
areas of END transmission by APHIS but cannot export fresh, chilled,
or frozen poultry meat until FSIS certifies the poultry slaughter
inspection system as "equivalent" to the U.S. system for
all of Mexico. Other Mexican states are also currently working to
meet APHIS requirements.
If Mexico is able to expand exports of fresh, chilled, and frozen
poultry, the U.S.-Mexico poultry market could change. The total
value of chickens in Mexico would increase due to higher white meat
prices in the U.S. relative to Mexico. Because the U.S. is a much
larger overall poultry producer than Mexico, U.S. prices for chicken
and chicken cuts would not be significantly affected by the increase
in Mexican imports.
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