Majority of five-member panel must agree during February 24 hearing
WASHINGTON – On Wednesday, February 17, 2021, the Mexican Supreme Court released a draft ruling that would overturn a 2017 lower court decision preventing the Mexican federal government from implementing regulations to allow for the importation of fresh U.S. potatoes throughout the country. The case is scheduled to be decided by the five-member Supreme Court on February 24.
“Full Mexican market access for fresh U.S. potatoes has been one of the highest priorities for the National Potato Council and the entire U.S. potato industry for well over two decades. We are hopeful the majority of justices will agree with this draft ruling and finally allow the Mexican government to live up to its global trade responsibilities,” said Jared Balcom, Vice President of Trade Affairs for the National Potato Council (NPC).
“A positive decision on February 24 would represent a giant leap forward in the decades-old effort to provide Mexican consumers with year-round access to fresh, healthy U.S. potatoes. We are grateful for the hard work of the teams at USDA and the Office of the U.S. Trade Representative and their counterparts in the Mexican government who have been working for years to lift these protectionist restrictions,” said NPC CEO Kam Quarles.
The issue before the Mexican Supreme Court, and resolved by this draft ruling, began as numerous individual legal cases filed by the Mexican potato cartel “CONPAPA” in response to the Mexican government’s announcement in 2011 that they would open the country to U.S. fresh potatoes. The cartel’s lawsuit claims that the Mexican government has no authority to determine if agricultural imports can enter the country.
The draft ruling rejects that argument and affirms that the Mexican government broadly has the authority to make such a determination and specifically acted appropriately with regard to U.S. potato access.
Since the publication Mexico’s phytosanitary rule (NOM-012-FITO-1996) in 1996, the country has restricted the importation of fresh U.S. potatoes to a 26 kilometer-area along the U.S.-Mexico border. This restriction violates Mexico’s obligations under the USMCA, the WTO, and previously NAFTA.
In March 2003, the United States and Mexico signed a bilateral market access agreement that called for increased access to the five northern Mexican states in 2004, and for consideration of access to the entire country in the following year. Due to limits imposed by the Mexican government, the plans for full market access were halted.
In 2011, the Mexican government finally agreed to allow U.S. potatoes full access to their market beginning in May 2014; however, Mexico’s potato industry sued the Mexican government to maintain their domestic monopoly and prevent competition from imports. The cases made their way through the lower courts, eventually arriving before the Mexican Supreme Court in 2018. On February 24, 2021 the Mexican Supreme Court is scheduled to finally rule on the issue.
“Assuming the full Mexican Supreme Court affirms this draft ruling, the Mexican government will be empowered to provide U.S. fresh potatoes with full access immediately. We encourage them to take that step immediately and continue the process of normalizing trade between the two countries,” said Quarles.
Mexico is the third largest export market for U.S. potatoes and products valued at over $270 million in 2020. Despite the restriction to the 26 kilometer border region Mexico is the second largest market for fresh potato exports accounting for 106,000 metric tons valued at $60 million in 2020. The U.S. potato industry estimates that access to the entire country for fresh U.S. potatoes will provide a market potential of $200 million per year, in five years.
The National Potato Council represents the interests of U.S. potato growers on federal legislative, regulatory, environmental and trade issues. The value of U.S. potato production is over $4.5 billion annually and supports hundreds of thousands of jobs both directly and indirectly.