Update on Mexico's Imposition of Retaliatory Duties on Certain U.S. Products Due to Byrd Amendment Dispute
On August 18, 2005, Mexico imposed retaliatory duties on certain U.S. products classified in certain Mexican Harmonized System (HS) codes in light of the U.S.' failure to repeal the Byrd Amendment (the Continued Dumping and Subsidy Offset Act (CDSOA)).
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(The World Trade Organization (WTO) has ruled that the Byrd Amendment is inconsistent with the U.S.' international obligations. See BP notes below for additional details on the Byrd Amendment dispute.)
Retaliatory duties in effect for 12 months, unless U.S. complies with WTO decision. According to a report from the U.S. Department of Agriculture's (USDA's) Foreign Agricultural Service (FAS), Mexico's retaliatory duties will be in force for 12 months after August 17, 2005, unless the U.S. modifies the Byrd Amendment in accordance with the WTO decision, in which case, the tariffs will return to the previous levels (which Mexican Embassy sources have previously stated were zero).
9-30% retaliatory duties imposed on chewing gum, dairy blends, and wine. The FAS report also includes the following information about the U.S. products subject to Mexico's retaliatory duties:
| Tariff Code | Description | Retaliatory duty |
| 1704.10.01 | Chewing gum, including those covered with sugar | 9% |
| 1704.90.99 | Chewing gum, other | 9% |
| 1901.90.05 | Preparations made from milk products with a milk solids content in excess of 50% by weight, except those outlined in 1901.90.04 | 30% |
| 2204.10.01 | Sparkling wine | 20% |
| 2204.21.01 | Strong aged wines, whose alcoholic strength exceeds 14o Gay-Lussac at a temperature of 15o C, in clay, crockery or glass containers | 20% |
| 2204.21.02 | Red, rose, or white wines, whose alcoholic strength does not exceed 14o Gay-Lussac at a temperature of 15o C, in clay, crockery or glass containers | 20% |
| 2204.21.03 | Grape wines, called fine wines, claret types whose alcoholic strength does not exceed 14o Gay-Lussac at a temperature of 15o C. For red and white wines, minimum of 11.5o and 12o respectively. For Rhine type wines, a minimum of 11o. | 20% |
| 2204.21.04 | Champagne: other wines containing carbonic gas | 20% |
| 2204.21.99 | Other | 20% |
| 2204.29.99 | Other | 20% |
Mexico sets cap for retaliatory duties on dairy blends.According to FAS, the retaliatory duty of 30% imposed on dairy blends under HTS 1901.90.05 will be imposed on the first 29,400 metric tons imported into Mexico, with the tariffs reverting to the 2003 published levels (zero under NAFTA) after that amount has been imported.
See ITT's Online Archives or 08/23/05 news, 05082305, for previous BP summary on Mexico's imposition of retaliatory duties.
Mexican government's Diario Oficial notice (in Spanish only) available via fax only by emailing documents@brokerpower.com
USDA FAS Global Agriculture Information Network report (dated 08/22/05) available by emailing documents@brokerpower.com.
BP Notes on Byrd Amendment
On May 1, 2005, both the European Union (EU) and Canada began imposing 15% additional duties on various U.S.-origin products in light of the U.S.' failure to repeal the Byrd Amendment.
Japan has also announced that it will begin imposing on September 1, 2005, retaliatory sanctions on certain U.S. products in 19 HS codes in light of the U.S.' failure to repeal the Byrd Amendment.
The Canadian government has previously explained that the WTO has granted retaliation authorization to Canada, the EU, Brazil, Chile, India, Japan, Korea, and Mexico. The Canadian government has also stated that although Thailand and Indonesia participated in the WTO Byrd Amendment dispute, these two countries did not request retaliation rights.
See ITT's Online Archives or 09/02/04 news, 04090205, for BP summary of the WTO's authorization for Mexico and other countries/economies to impose retaliatory measures for the Byrd Amendment.)
(The Byrd Amendment requires that the revenues from antidumping (AD) and countervailing (CV) duties assessed on or after October 1, 2000 be distributed on an annual basis to the affected domestic producers (i.e. currently operating producers (including worker representatives) that were either petitioners for the AD/CV duty order in question or interested parties in support of the petition) for specified qualifying expenditures (e.g. manufacturing facilities, research and development, personnel training). See ITT's Online Archives or 10/19/00 news, 00101837, for BP summary.)