Mexico’s inflation pact eases food watchdog in ‘goodwill’ move

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MEXICO CITY — Mexico’s decision to exempt certain food manufacturers and retailers from quality checks by national health regulators as part of an anti-inflation plan to cut costs is a ‘goodwill’ deal , President Andres Manuel Lopez Obrador said Monday.

Last week, Lopez Obrador and officials announced the plan worked out with companies including Walmart’s Mexican unit and tortilla maker Gruma. The plan also exempts them from paying import duties on food products.

The agreement places responsibility on signatory companies to ensure that their imported products meet safety and quality standards. Finance Minister Rogelio Ramirez said it applied to all food products, not just basic groceries, brought in by businesses.

The measure, which must be published in Mexico’s official gazette to take effect, has sparked discontent among competitors. It also raised concerns that the deal could violate a trade agreement with the United States and Canada and could also allow the introduction of crop and animal diseases.

“We have to make sure food prices don’t go up,” the president told a regular news conference on Monday when asked about the weakening of regulations.

Lopez Obrador said the decision was made to cut red tape for regulators Senasica, Mexico’s agricultural inspector, and Cofepris, a health regulator.

All trade between Mexico and its main trading partner, the United States, has been duty free for years. Mexico also has trade agreements with several dozen other countries that include clauses reducing tariffs for agricultural products.

If Mexico allows the entry of food products from countries without such agreements, it could violate existing treaties, experts say.

“That’s the punitive part,” said Rocio Ruiz, a former economy ministry official, of a potential breach of the trade deal.

“In general, these treaties prohibit you from discriminating against trade allies by granting such an advantage to domestic companies,” she said Monday at a forum organized by the economic competition authority Cofece.

Senasica has since said it is working with Mexican industry to protect food production and will do more to help importing companies avoid introducing pests or diseases.

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