Milford chronicle., 1950-07-14
The End OF u. S.
Mexican Trade Pact

Termination of the trade agree
ment between the United States
and Mexico on Dec. 81 will affect
traders all over the world and raise
import duties on many things
bought by American consumers
such as gasoline and tomatoes.
When any trade agreement laps
es, all of the American import du-
ties which had been lowered By
that agreement go back up to the
rate established in agreements with
other countries. If the rate which
will then control is that one estab-
lished in the U. S. Tariff Act of 49,
30.
When the U. S. Mexican agree
ment was signed in 1912, the U. S.
lowered its rate on about 40 classes
of items on which Mexico sought
concessions. When the rates went
down, all countries IN the world
got the benefit of the new low du-
ties. That's a part of the most
favored nation" policy, under
which tariff reductions are made
When Mexico found that it's dol
lar balance was dwindling it de-
cided it needed higher tariffs to pro
tect home industries. Mexico and
the U. s. tried for two years TO
work out some new trade agree
ment which would be mutually sat
isfactOry, but they finally gave up
~
tiOn of the treaty on June %.
Then the U. S. Trade Commission
went 70 work revising upward all
of the duty rates which had been
lowered by the 1912 Mexican agree
ment The chief items in the United
States $231,000, 0,000-a-year import
trade with Mexico are lead, petrol
cum, zinc, cocoa, fibres for cOrdage
and tomatoes and other fresh veg
etables. These were the principal
items in which Mexico was interes-
ted when it negotiated the treaty
in 1912. Other nations, however, ex-
ported to the U. S. as much or more
of some of these items. And they
too got the benefit of the traffic
reduction.
The item creating the most ex-
citement now among foreign trad
rs is petroleum. Under the Mexican
agreement. the import tax was OIL
ly ia cent per gallon on a quantity
of petroleum equal to 5 per cent Q
of the total U. S. refinery produc
tiOn for the previous year Thi
amounted to about 97,000,000 bar
rels in 1949. The remaining import
of about 1O9.OOO,OOO barrels, wa
taxed " cent per gallon. Now al
petroleum imports will be take
at the 12 cent rate. This rate wa
established in the next most liberia
trade agreement that with Vene
Zuela in 1889.
Hardest hit will be Venezuela
which in 1949 sent to the U. S, 51.O
per cent of all U. S. petroleum i'm
ports. Other oil importers, in th
order of their Importance in tn
U. S. market, are the Netherland
West Indies, Kuwait, Saudi Arabs
Colombia, Mexico and Iran. MexiC
accounted for only 3.66 per cent {
the total. G,Rj
On the other big team, lead, Ii
import duty will rise 100 per cen
Lead bearing ores, for instanc
will rise from q cent per poun
to 11s cents per pound. Canada
cOntending with Mexico for fir
plact among lead exporters to IL
U. S. So Canada is greatly concern
ed about this.
More will be heard of these in
port duties when the leading n;
tons of the western world gath,
at Torquay, England, in Septen
ber to spend the winter writir
new trade treaties. The net effe
of the termination Of the u. S. Me
ican agreement will be to stren
then the bargaining position of Il
u. S. at TOrQuay, since several n
tiOns, such as the oil and lead il
pOrters, will be eager to sign ne
agreements with the U. S. whi,
will at least restore the duty rat
in effect during the life of the Me
ican agreement.