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U.S. Efforts to Remove Mexico's Gas Tariff Shelved

U.S. Efforts to Remove Mexico's Gas Tariff Shelved

Given the level of opposition south of the border, the Interstate Natural Gas Association of America (INGAA) said its plans to forego for the next couple of years its efforts to persuade Mexico to lift its tariff on natural gas.

"We're not going to push for repeal of the tariff now. But perhaps in the next few years the Mexican government would be interested in revisiting the issue," a spokeswoman for the pipeline group noted. "It seems futile to raise it now," she said.

INGAA decided to temporarily shelve the issue after natural gas was pulled from the "illustrative list of agreed tariff reductions" in May following a NAFTA Ministerial meeting with Canada and Mexico. This action was taken when the United States could not agree to the terms under which Mexico said it would remove the tariff on gas.

The Mexican government proposed eliminating the gas tariff in three stages, ending in October 1999, if the United States would remove immediately its tariffs on an unrelated product, purified terephthalic acid (PTA). But the proposal was strongly opposed by PTA producers in this country, and as a result failed.

Pipeline companies are seeking to lift the tariff on gas because they claim it puts U.S. pipelines that transport natural gas to the United States-Mexican border at a distinct disadvantage with Mexican natural gas providers.

Susan Parker

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