A Small and Dangerous Spat
President Obama has been warning that tit-for-tat protectionism could drive the world into an even worse economic slump than it is already in. He is right. Unfortunately, Congress doesn’t seem to be listening.
The $410 billion spending bill that Mr. Obama signed into law last week cuts off financing for a pilot program that allows Mexican trucks to deliver goods across the United States. The move clearly violates the North American Free Trade Agreement, which promised — starting in 2000 — to open cargo transport throughout the United States, Mexico and Canada to carriers from all three countries. This week, Mexico retaliated, leveling tariffs against $2.4 billion worth of American imports.
Both the United States and Mexico must be careful. A full-fledged fight could threaten more than $350 billion in annual commerce between the two countries. That is clearly in nobody’s interest.
An arbitration panel ruled in 2001 that the United States was in breach of its Nafta obligations on Mexican trucks. But thanks to the Teamsters union and its allies in Congress, all but a small number of Mexican carriers are restricted to operating within a 25-mile band from the border.
The truck drivers’ argument that Mexican trucks are unsafe is spurious — a flimsy cover for protectionism. Data from the Department of Transportation show that Mexican trucks and drivers operating in the United States — along the border and in the pilot program — have a better inspection record, with fewer violations, than their American counterparts.
President Obama has so far shown a worrying ambivalence about trade. He has called for renegotiating Nafta, creating anxiety in both Ottawa and Mexico City — claiming that this can somehow be done without harming trade. While he managed to persuade Congressional Democrats to water down a “Buy American” provision in the fiscal stimulus package, he did not get them to pull it altogether.
We understand the White House did not want to threaten the passage of the spending bill by raising a ruckus over Mexican trucking, a comparatively minor issue. But it is time for Mr. Obama to put some political muscle behind his declared support for open trade.
He can start by persuading Congress to revive the truck pilot program or start a new one. And he must make clear that — sometime soon — all properly inspected Mexican trucks must be able to work throughout the country, as Nafta requires. That would not only solve this trade spat, but it would provide the world with needed reassurance that the United States will stand by its trade agreements in these difficult times.
Editorial The New York Times
Related posts:
- Showdown looms over Mexican Truck Program – Will Obama do the right thing?
- FMCSA Administrator John Hill rebutts the rants of Teamsters President Jimmy Hoffa
- Truckers News – Calderon to press Obama for resolution to Mexico truck dispute
- Violating NAFTA is a dangerous move
- Two in a row! More B.S. from the master, Jimmy Hoffa!
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Mexico, let your voice be heard worldwide! Put tariff’s 100% of all US imports at astronomical rates! This is some serious shit, such a small percentage won’t get the volume of public outcry needed to immediately correct this injustice.
Denise, Dan,
You may think it’s small and it is, about 2.4% of gross imports into Mexico. But it is enough to get the attention of Congressmen who can do the right thing and change the law.
Especially when they see it costing their constituents their jobs.
And if you will look at the list of products effected, alternatives are available in Mexico so the rising prices of the imported goods will have absolutely no impact on Mexican consumers.
All in all a very astute way to handle this. I am glad to see Mexico taking their rightful place and standing up for their rights.
You’re right, I did a little more research online and there is a HUGE public outcry! I just got off the phone with Senator Cantwell’s office, the representative told me he didn’t have any information for me yet . . . but they are aware of the problem and are working on a solution.
IT’S ABOUT TIME!
Well, I’ve read all the comments on why Mexican truckers should be a allowed into the United States. Now, let me give you my perspective. If the list of products is the only items that are on the tarriff’s list good ridence. Since the border has been opened its been almost impossible to get a decent load out of California, Arizonia, Texas, and New Mexico. I’ve seen Mexican truckers all the way in Maine. Some but not all can not speak English and that means they can’t read the signs either. I personally will never take any freight into Mexico and neither will any of my trucks. I do how ever take it to Laredo Tx. from there it is picked up by a Mexican trucker as it should be. The United States is not here for Mexicans to come over and pilferidge. There are to many illegals here working and not paying taxes. The money that these people are making is getting sent back to Mexico and not staying in the United States anyway. The border should be closed and it should stay that way.
Thanks for the effort of you and your husband Denise. I am not surprised at the response you got.
Most of these politicians have no idea of what they support or what the bills contain. Others sell their soul and self respect in a quid pro quo dealings.
It’s been that way for more than 200 years. Maybe these tariff’s will jar some sense into their heads
Fed-X travels ALL of Mexic’s roads every day.
I say kick THEM out along with creating the tariffs.
John
American Trucker, while I respect you opinion, I disagree with most of what you say.
1. The products on that list may seem insignificant to you, but they represent American producers and businesses that will suffer if the tariff’s are imposed. They represent loads of freight coming to all the border states. Slow those products, we suffer, the truck stops lose, it’s a chain. And those products were carefully chosen to have the most impact on Congressmen whose constituents will be affected.
2. You can’t blame the border being open for the shortage of freight. 100 Mexican trucks over a 2.000 mile border makes zero impact on the freight situation nor the rates. It’s the economy and scarcity of freight that cause the low rates. Supply and Demand. I was talking to the owner of my company today and he informed me that Celadon is bidding and hauling freight out of Laredo for $.85 cpm. The Mexican carriers are refusing to haul it south for that rate. We are still paying $1275.00 to have a load hauled from Laredo to Toluca Mexico on a Mexican carrier, a distance of 750 miles. Freight to Monterrey (165 miles) is holding steady at $450.00. Don’t blame the Mexicans. Blame the mega carriers. It is hurting all of us.
3. The “don’t speak English” is a worn out argument. How do you know what their proficiency level is? Comprehension and proficiency are two different things. My Spanish sucks, but I can read road signs in Spanish and navigate my way around Mexican highways with no problem. Signage is not that different in either country. Most of the signs in both countries is universal. All it takes is a little common sense. I don’t speak French but I have little problem driving in Quebec. While I cannot speak Spanish worth a damn, I can understand the news on TV, the soap operas (novellas) and I can read Spanish newspapers and comprehend what I read. I am no different from the majority of the Mexican truckers.
4. Not coming into Mexico is of course your personal choice. But if that choice is made listening to fools like the Trucking Bozo who knows absolutely zilch about Mexico, you are doing yourself a disservice. Imagine trucking as it was here 20 years ago. Without the bullshit that is being crammed down our throats now. Mexico has excellent roads, equal to and in some cases better than the US. Personal safety? Common sense, just like you use in the US. Have your shit together and you will have no problem from the authorities. Generally, those that get sideways with the law down here have done something extremely stupid and deserve what they get. But again, your choice.
5. Illegals have nothing to do with this issue. And the Mexicans coming into the US under this program are not “pilfering” this country. No more so than the Canadians. As far as I’m concerned, anyone doing a honest days work is entitled to do anything he wants with what he earns. And illegals do pay taxes on many levels and for the most part, gain nothing from it.
I appreciate your participation in the debate though