U.S. Potato Growers to Gain Full Access to Mexican Market After High Court Ruling

Trade Update • APRIL 28, 2021

The Mexican Supreme Court today ruled by a unanimous vote of 5-0 in favor of overturning a 2017 lower court decision that prevented the Mexican federal government from implementing regulations to allow for the importation of fresh U.S. potatoes throughout the country.

The ruling, which has been delayed several times since a draft was issued earlier this year, marks the end of a decade-long legal process that began when Mexico’s potato industry sued its government to prevent competition from imports.

The National Potato Council and Potatoes USA welcomed the decision, which they said is consistent with Mexico’s obligations under both the United States Mexico Canada Agreement and the World Trade Organization.

“Mexican consumers and the chip manufacturers in Mexico have waited way too long to access fresh U.S. potatoes,” said Jaren Raybould Chair of Potatoes USA, adding that growers are “hopeful that with this ruling the authorities will quickly reimplement the market access agreement and allow for high-quality U.S. potatoes to be enjoyed throughout Mexico.”

Noting that the effort to gain full access to the Mexican market has spanned numerous administrations and sessions of Congress, NPC CEO Kam Quarles expressed thanks to the U.S. Department of Agriculture, the U.S. Trade Representative’s Office, and lawmakers “who have worked for years to encourage Mexico to lift these protectionist restrictions.”

Background

The issue in dispute began as numerous individual legal cases filed by the National Confederation of Potato Growers of Mexico (CONPAPA) in response to the Mexican government’s announcement in 2011 that they would open the country to U.S. fresh potatoes. The group’s lawsuit claimed that the Mexican government has no authority to determine if agricultural imports can enter the country.

Today’s Supreme Court ruling rejected CONPAPA’s argument and affirmed 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 introduction of a phytosanitary rule in 1996, Mexico has restricted the importation of fresh U.S. potatoes to a 26-kilometer area along the U.S.-Mexico border. This restriction has acted as a trade barrier that violates Mexico’s obligations under the USMCA, the WTO, and previously NAFTA.

Market Opportunities

“Mexico offers a significant opportunity for U.S. potato growers,” said John Toaspern, chief marketing officer at Potatoes USA. “Mexican retailers, foodservice operators, food manufactures and ultimately Mexican consumers will benefit from this wide array of high-quality potatoes available year-round.”

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 within five years.