NARA testifies on Mexico’s discriminatory VAT on US feed ingredients

The North American Renderers Association testified Dec. 3 before the U.S. International Trade Commission, calling on the U.S. government to address Mexico’s unfair application of a value-added tax (VAT) on imported U.S. feed ingredients.

NARA has been working closely with USDA and the Office of the U.S. Trade Representative in recent months to elevate the issue, which the organization says is putting U.S. renderers and their supply-chain partners at a competitive disadvantage.

The testimony took place as part of the mandatory six-year review of the United States-Mexico-Canada Agreement (USMCA) during a public hearing in Washington, D.C., where stakeholders were invited to share concerns about the agreement’s implementation.

Dana Johnson Downing, NARA’s senior vice president of international programs, was a member of a panel of ag groups that testified.

In her testimony, she presented NARA’s case directly 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.”

Central to NARA’s argument is Mexico’s continued application of a 16 percent VAT on imported U.S.-origin rendered animal-protein meals and other feed inputs, despite the USMCA’s market-access provisions guaranteeing these products duty-free entry.

At the same time, comparable domestically produced Mexican animal-protein meals are exempt from the tax.

This unequal treatment raises a significant national-treatment concern under USMCA Chapter 2 and is inconsistent with obligations under the General Agreement on Tariffs and Trade Article III.

NARA argues that, in practice, this 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, undermining the spirit and letter of the USMCA,” Johnson Downing said. “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 also met with leaders at USDA, USTR and on Capitol Hill to reinforce the urgency of resolving this VAT issue and urge that it be prioritized during U.S.-Mexico negotiations under the USMCA framework.