The North American Renderers Association testified before the U.S. International Trade Commission on December 3, urging the U.S. government to address Mexico's application of a value-added tax on imported U.S. feed ingredients.
NARA has been working with the United States Department of Agriculture (USDA) and the Office of the U.S. Trade Representative (USTR) to address the issue, which the association says puts U.S. renderers and their supply-chain partners at a competitive disadvantage.
The testimony occurred during the mandatory six-year review of the United States–Mexico–Canada Agreement (USMCA), at a public hearing in Washington, D.C., where stakeholders shared concerns about the agreement's implementation. Dana Johnson Downing, NARA's senior vice president of international programs, presented NARA's case to U.S. trade officials.
"The USMCA remains foundational to North American agriculture, but its benefits can only be fully realized if every trading partner adheres to the letter and spirit of its commitments," Johnson Downing said in her testimony. "For the animal-products sector, effective enforcement is not optional — it is essential."
NARA argues Mexico's continued application of a 16% VAT on imported U.S.-origin rendered animal-protein meals and other feed inputs conflicts with the USMCA's market-access provisions guaranteeing these products duty-free entry. Comparable domestically produced Mexican animal-protein meals are exempt from the tax. This treatment raises a national-treatment concern under USMCA Chapter 2 and is inconsistent with obligations under the General Agreement on Tariffs and Trade Article III. NARA argues the VAT acts as a de-facto tariff, undermining the level playing field the USMCA was designed to create.
"This VAT operates as a de facto tariff," Johnson Downing said. "Undermining the spirit and letter of the USMCA. It threatens the competitiveness of U.S. exports and directly harms our Mexican customers, many of whom operate on thin margins and cannot absorb the new costs."
NARA president and CEO Kent Swisher and Johnson Downing met with leaders at USDA, USTR and on Capitol Hill to reinforce the urgency of resolving the VAT issue and urge that it be prioritized during U.S.–Mexico negotiations under the USMCA framework.
