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Page last updated at 02:57 GMT, Tuesday, 17 March 2009

US law sparks Mexican trade row

US protesters rally against Mexican lorries, file image
The arrival of Mexican lorries proved controversial in the US

Mexico will impose higher tariffs on a range of US goods in retaliation for a "protectionist" law passed in the US, Mexico's economy secretary has said.

Last week the US government stopped a pilot scheme which had allowed Mexican lorries to use roads in the US.

Gerardo Ruiz Mateos said the decision violated a free-trade deal between the nations and said higher tariffs would affect $2.4bn (1.7bn) worth of goods.

The US government promised to work on a new lorry programme.

Mr Ruiz Mateos said the US decision broke a provision of the North American Free Trade Agreement (Nafta), signed in 1994, which was supposed to have opened cross-border transportation by January 2000.

"We consider this US action to be wrong, protectionist and a clear violation of the treaty," he said.

"By deciding to protect their trucking industry, they have decided to affect other countries and the region."

'Legitimate concerns'

He said the tariffs would affect agricultural and industrial products from 40 US states.

These will not include corn, beans or wheat, upon which Mexicans depend, reports the BBC's Stephen Gibbs, in Mexico.

But Mexico gave no further details of how high the tariffs would be set, with Mr Ruiz Mateos saying that his department would issue a full list later in the week.

White House spokesman Robert Gibbs said US and Mexican officials would work on legislation for a new plan "that will meet the legitimate concerns of Congress and our Nafta commitments".

The initial pilot scheme had been a pet project of former US President George W Bush.

He faced years of legal wrangling and opposition from Democrats, environmentalists and lorry drivers' unions.

They had argued variously that Mexican lorries did not meet US safety standards, produced too much pollution and would harm the job prospects of US drivers.

Mr Bush finally launched the scheme last year, but a law backed by the Democrats pulled the funding last week.

This dispute reveals wider concerns on the part of Mexico, our correspondent says.

As a presidential candidate, Barack Obama indicated that he would like to renegotiate the Nafta agreement, partly in order to protect American jobs.

The Mexican government is firmly in favour of Nafta, which it sees as a major economic boost for the country, and it is determined that the agreement is not altered, unless through formal negotiation, our correspondent adds.

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