The Agricultural Commission of Mexicos House of Representatives has announced plans to force President Vicente Fox to use the Mexican constitution to prevent duty-free entry of agricultural goods under the North American Free Trade Agreement.
Article 131 allows the president to impose protective tariffs in cases where Mexican production is threatened by imported goods.
Agriculture Commission president Jaime Rodriguez said he is drafting a decree that would obligate the president to erect a protective tariff barrier in anticipation of the elimination of duties on certain agricultural products in January. Under Article 131, Mexicos congress can grant the president the power to increase or decrease existing tariffs on either imports or exports, or to establish new tariffs.
According to Rodriguez, the provision also empowers congress to order the president to restrict import, export, or transportation of goods when an urgent need to do so is identified. Such an order can be issued by congress in order to regulate foreign trade and preserve the nations economic stability in times of crisis.
In order to move ahead with implementation of this constitutional article, Rodriguez and other opposition members of congress are calling for President Fox to declare that Mexicos agricultural sector is in grave danger.
The constitutional initiative proposed by Rodriguez and his colleagues follows recent successes by opposition groups in reversing presidential policy on food trade issues. Earlier this year, Fox secured a stay in implementation of the protective tax on beverages containing fructose, but opposition factions in Mexicos supreme court overruled him.
Invocation of Article 131 would run counter to the executive branch's preference for using negotiation rather than confrontation in protecting the interests of Mexicos agricultural sector. However, because the ruling PAN party is well short of a congressional majority and populist opposition groups still strongly influence the judicial branch, Rodriguez may succeed in using the constitutional article to force Fox to implement tariffs.
If any protective tariffs are enacted under Article 131, they would probably be overruled by the dispute resolution bodies of NAFTA or the World Trade Organization. Moreover, they would exacerbate trade tension between Mexico and its NAFTA partners at a time when Presidents Fox and Bush are attempting to negotiate solutions to bilateral food trade conflicts.
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