The North American Free Trade Agreement (NAFTA) opened up trade opportunities between the U.S. and Mexico in poultry products. Mexico agreed to reduce tariffs on agricultural products over the adjustment period and eliminate non-tariff barriers. As the phase-in of the NAFTA liberalizations reached completion, safeguard measures were instituted to protect Mexican producers from dumping or import surges and consumers from unsafe foods. Under NAFTA, tariffs on poultry meat imported into Mexico fell from 260% in 1993 to zero in 2003. Imports surged and Mexican poultry producers petitioned for protection. In July 2003, Mexico imposed a bilateral safeguard measure in the form of an annual TRQ on chicken leg quarters to protect local producers for five years. This paper analyzes the background of the U.S.-Mexican poultry trade dispute and implications of the voluntary safeguard agreement.