Has anyone thought about the cost to American business and American consumers when the righteous tariff’s take effect in a couple of hours? Has anyone thought of the potential job loss to American workers?

It is for certain Jimmy Hoffa could care less. Nor does Todd Spencer of OOIDA who is of the opinion that Mexico is simply blowing smoke up peoples asses, as he so disdainfully stated on the Trucking Bozo radio program the other day. They’re both preening and patting themselves on the back about their shallow victory.

That’s right, it was published in the Federal Register today. The highly successful Cross Border Demonstration Program with Mexico, was officially ended today.

American business is already assessing the potential losses, in profits and in terms of job losses and the numbers aren’t pretty.

More than 40,000 American workers in 17 or more states can potentially lose their jobs because of Hoffa’s protectionist attitude, an attitude not based on any factual data concerning the safety of Mexican trucks, but simply because the Teamsters are not allowed to organize in Mexico, as they are in Canada. Let’s hope the majority of those 40,000 jobs lost are union jobs, Teamster jobs. Wouldn’t that be ironic.

There are over 6.5 million trucks in the United States. The Cross Border Program allowed 98 Mexican trucks to roam among them. And over that, they are willing to risk a trade war with Mexico. They are getting what they asked for and what they deserve

From the vineyards of California’s Napa Valley to Oregon, to little towns in the heartland, there is a sense of impending doom.

From the Santa Rosa (Ca.) Press-Democrat
California wineries dragged into trade fight between U.S., Mexico

Wine, which has been shipped to Mexico without any tariffs since 2006, will face a 20 percent tariff, said Joe Rollo, export director for the Wine Institute…….

Mexico is an emerging market for California wine exports, fueled largely by U.S. tourism. More than 100 California labels are represented in the market, mainly in coastal tourist areas, according to the Wine Institute……..

California wineries sold $23 million in wine in Mexico in 2008, down slightly from the prior year. Sales leapt from $17 million in 2006, when the tariff was 20 percent, to $24 million in 2007 when the tariff was eliminated, Rollo said.

Up the coast in Oregon

The Oregonian
Mexican tariffs will cost Oregon ‘millions’

…………. a move effective today that could cost Oregon exporters tens of millions of dollars.
The duties include 20 percent tariffs on Christmas trees, pears and frozen potatoes, all of which Oregon sells to Mexico……
Mexico spent $748 million last year on goods from Oregon…….
“The vote was to save jobs for the unions, but it’s going to cause problems for several other industries,” said Bill Brewer, executive director of the Oregon Potato Commission.

He said the United States could lose its entire $80 million in annual french-fry exports to Mexico, for example, because Canadian competitors won’t have to pay $16 million in tariffs. Most of those fries came from the Northwest.

And for those who mistakenly assume Mexican businessmen are stupid, A Mexican official confirmed Wednesday that pressuring specific U.S. politicians was one consideration in picking products from certain states for tariffs. He spoke on condition of anonymity, saying Mexican officials don’t want to inflame the dispute further. The same Mexican official confirmed his government chose the $2.4 billion worth of products partly to target states with powerful Democratic politicians.

“The intention is to let the constituents know that it’s important the United States respects and abides by its international obligations,” the Mexican official said.

Proving that the politicians the unions have in their hip pockets are continuing to march to the beat of their masters drum, U.S. Rep. Peter DeFazio, D-Ore. stuck by his position and blasted Mexico for its tariffs, which he branded illegal. “I don’t think these things can or should stand,” said DeFazio, a member of the House Transportation and Infrastructure Committee, where he chairs the Highways and Transit Subcommittee.

No Mr. Defazio. You know perfectly that Mexico has the right to impose these sanctions in retaliation for us reneging on our word for the past 15 years. You have been part and parcel of perpetrating the fraud that led to this moment.

As I previously mentioned, Mexico’s tariffs could cost the United States more than 40,000 U.S. jobs, including roughly 1,000 in Oregon, according to one economist. Many of the targeted products are easily available from other countries, meaning Mexican consumers won’t be inconvenienced, said Dermot Hayes, an Iowa State University professor.

The list includes grapes — targeted for the highest tariff, of 45 percent — which are grown in California, home state of Democratic U.S. House Speaker Nancy Pelosi. Hayes cited other examples such as shampoos and sunglasses, from Obama’s state of Illinois; bowling equipment, from U.S. Senate Majority Leader Harry Reid’s state of Nevada; and books and brochures, from Secretary of State Hillary Clinton’s home, New York.

“Keep in mind that all these tariffs come up from zero percent,” said Edgar Navas, trade director for Nafta Group, a Portland consultancy. “A lot of products that are in transit will be affected.”

Navas feels that Mexico’s action is justified and within the country’s rights under the Nafta pact. He faults the Teamsters for provoking Mexico and risking a trade war.

“You take the economic panic, and it’s very prone to nationalistic reactions and pseudo-patriotism,” Navas said. “It’s just going to accentuate the economic crisis.”

There are tariff’s being raised on personal hygiene products that will effect workers from Proctor and Gamble headquartered in Ohio. Just about anything you can imagine that Mexico imports from the US is covered except for the basic commodities.

And Hoffa and Todd Spencer claim they are concerned about the loss of American trucking jobs? Well, during the 18 months of this successful program, not one American job was taken by a driver from Mexico. On the other hand, the tariff’s and the lowered demand for American products will impact an already slow freight base.

Remember that boys and girls, when you’re sitting in a truck stop for a day or two and finally have to take a shit load of freight just to be moving. Thank Mr Hoffa for your troubles. And don’t forget to thank Todd Spencer and all those who have propagated the lies of him and Hoffa over this issue.

These retaliatory tariffs were unnecessary and we would not be having this discussion if people would learn to think for themselves and research a subject, instead of letting their fears and prejudices overrule common sense, which has been the case here.

Imagine, one little man’s ego causing so many people so much misery, and needlessly. Sleep with that thought if you can.

If you wanted to do protectionism, do it competently. Go the full Smoot-Hawley. But over 98 to enrage Mexico, to threaten to destroy NAFTA, and to show the world that the American Congress is willing to impose protectionism over trivialities at a time when the economy is hanging by a thread, where every other country is looking to see if American is going to turn protectionist.

And, as we saw in the stimulus package, it included a provision to buy American, which enraged the Europeans. There is a huge amount at stake, meaning the world economy and the risk of a world depression if you have trade wars. And to do it over 98 truck is absolutely absurd.

SOURCES:
National Review
The Oregonian
and others, including my own brilliant mind containing a brain that I know how to use.

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There are many good articles out there this morning decrying the Teamsters and others for getting us into this mess we’re in today, but I am going to liberally quote this excellent report from the Lone Star Times

LST leads off with one of Jim Hoffa’s oft repeated lies about the program.

The International Brotherhood of Teamsters hailed the end of the road for the trucking program, and issued a sharp rebuke of Mexico’s retaliatory action Monday. “The right response from Mexico would be to make sure its drivers and trucks are safe enough to use our highways without endangering our drivers,” Teamsters President James Hoffa said.

followed by a quote from Hoffa’s Congressional puppet who at first glance would appear to have had a change of heart or grown a pair to go against his master.

A long-time critic of the program, Sen. Byron Dorgan (D., N.D.) said he would work with the Obama administration to address the safety concerns. “I have said all along that I have no problem with Mexican long-haul trucks being allowed into the United States if it can be done safely,” he said.

Faithfully adhering to the script written two decades ago, Democrats, Teamsters and anti-free traders all continue to display their allegiance to a tired and decrepit ideology conservatives and libertarians have fought for generations to bury. The spectacular success of global trade over the last twenty plus years has raised the standard of living for people around the world and brought a level of wealth to America earlier generations would find astonishing.

After formal negotiations begun in 1990, a majority vote of Republicans in Congress saw passage of the North American Free Trade Agreement in 1993, creating the second largest free trade bloc in the world measured by combined GDP. The treaty was born under a Republican regime and eventually ratified and signed into law by a Democratic president. The hard economic realities are irrefutable concerning the benefits of NAFTA to the three member nations.

The Obama administration has angered the Mexican government by violating a provision of a treaty we agreed to and ratified nearly sixteen years ago. There are many issues on which the Mexican government can be justifiably criticized, but not this one. America has spent all these years breaking one promise after another in violating compliance with one of the most important treaties ever signed by this nation.

Trade wars have very often resembled barroom brawls beginning with one man punching another who then hits a bystander who then slugs an onlooker without warning. They have a way of spiraling quickly out of control and culminate in everyone in the room suffering terribly.

It is time now for America to live up to her obligations, cease coddling industries and unions while stoking protectionist fears around the world by displaying our fecklessness. The current precarious state of global markets does not need the lack of confidence and fear of retaliation generated by the USA arbitrarily breaking its word. This country, our neighbors and allies across the globe need now, more than ever, strong and steady leadership and that begins first with keeping our word.

Democratic critics have questioned whether Mexican authorities maintained adequate safety records on drivers, as well as whether Mexican drivers spoke English and were adequately tested for drugs and alcohol. – Wall Street Journal

The DOT OIG Final Report signed off on the pseudo concerns of the critics.

The carriers involved in the program have had their entire operations scrutinized by FMCSA as part of the PASA process. And the report stated that Mexico has made significant gains in it’s drug testing program, which coincidentally, is tied into the issuance of the Licensia Federal, something only now being discussed in Washington for American drivers. And the tests are given by government facilities by government doctors and lab techs. This is something that Hoffa and others try to get you to ignore.

The Wall Street Journal further expose the outrageous lies of Hoffa and others.

When G-20 finance ministers met in England over the weekend to discuss a way out of the global financial crisis, the group pledged to eschew trade protectionism.

That sounds good. But some of the governments represented at the meeting aren’t walking the walk on global commerce at home. Instead they’re taking the side of special interests that want to weaken foreign competition. One culprit that comes to mind is the U.S.

In violation of the North American Free Trade Agreement, the U.S. last week again closed its southern border to any Mexican trucks additional to those with existing permits. It did so on the usual grounds that Mexican trucks are unsafe, even though that hoary claim has been demolished by extensive testing. But Congress and President Barack Obama are catering to the Teamsters union, which has spent more than a decade lobbying to keep Mexican competition off U.S. highways.

Candidate Obama ran for president as a protectionist, with a special emphasis on a promise to block ratification of U.S. free trade agreements with South Korea and Colombia. Big Labor was a big giver to Mr. Obama’s campaign and he owes it big time. Last week he began paying up. During confirmation hearings, his nominee to be U.S. Trade Representative, Ron Kirk, sharply criticized both agreements.

Yet if Mr. Obama and congressional Democrats were not expected to champion freer trade, some hoped they would not reverse liberalization gains of recent years. The decision on Mexican trucks last week shows they are doing just that.

Everyone whines about border security….

There would also be security gains if trucks carried cargo in both directions. As it stands now, once cargo is off-loaded in the border zone, the vehicle returns home empty. This creates many opportunities for smuggling drugs, weapons and cash.

And about the safety record, new and old!

Mexican trucking in the U.S. is not new. More than 800 Mexican carriers — all of which are majority owned by Americans — have permits that were grandfathered more than 20 years ago. And their safety record is enviable. A 2007 DOT study of the performance of Mexican carriers in the U.S. from 2003-2006 found Mexican trucks to be safer than U.S. trucks. Even Mexican short-haul trucks operating in the border zone had a better record than U.S. trucks.

And surprise, surprise!!!

he 27 Mexican carriers in the pilot program compiled an impressive safety record in 2008, judging by the rate at which randomly stopped vehicles received an “out-of-service” designation — meaning they did not comply with all safety regulations — from DOT inspectors. Whereas all U.S. carriers had a vehicle “out-of-service” rate of 21.6%, all Mexican carriers had a rate of 20.7% and Mexican carriers in the pilot program had a rate of 7.3%.

So how have Congress and President Obama responded to this success? They killed the program by prohibiting its funding in the new $410 billion omnibus spending bill. This ends new Mexican competition in trucking.

Mexico says it will retaliate, and if it’s smart it will hit U.S. producers in strategic markets. This will be bad for Mexican consumers, but if constituents of protectionist U.S. senators feel the pain, it might succeed in changing attitudes in Congress. Given the political muscle of the Teamsters, there aren’t many other options.

So the question is. Who do you believe? The oversight arm of Congress in the guise of the Office of Inspector General? Do you believe proven statistics gleaned from roadside inspection reports? Or do you believe the rantings of one little thug with a hard on for Mexico since his union is not allowed to organize there?

Can you imagine how quickly he would be singing a different tune if Mexican law allowed him to organize in Mexico?

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Wall Street Journal – Mexican Truck Stop

Editor’s Note: To the consternation, I’m certain, of the opponents of the cross border program, another well respected news organization is questioning the hypocrisy behind the opposition to Mexican trucks.

By MARY ANASTASIA O’GRADY
November 26, 2007; Page A20

It’s hard to say who came out on top in the Nov. 15 debate among Democratic presidential candidates held in Nevada. But we do know that free trade took a beating. A majority of the candidates disapproved of some or all of the U.S. bilateral and regional trade agreements — including the North American Free Trade Agreement — and pledged to reverse the trend toward market opening if given the chance. Hillary Clinton stopped short of promising to undo Nafta but she called for a “trade timeout.”

It is troubling to hear the protectionist drumbeat growing louder in the Democratic Party, particularly as it concerns Latin America. The last time Washington adopted an anti-trade bias by signing into law the Smoot-Hawley tariffs in 1930, it set off a world-wide depression — and a period of isolationism in Latin America that took some 60 years to begin to reverse. Now Democrats seem to be saying that if they can only capture the White House, they are committed to reliving this painful history.

The Democrats’ anti-trade agenda is already playing out in Congress, with both houses continuing to block the full opening of the southern border to Mexican long-haul trucks under Nafta. Congress’s actions could damage the U.S. economy because Mexico has the legal right to retaliate. What’s worse is what this flouting of U.S. commitments to Mexico suggests to the Mexican people about Yankee integrity.

The problem dates back to 1995, when Bill Clinton issued an executive order — in violation of Nafta, which he had signed into law — to stop Mexican long-haul trucks from crossing the border. Mr. Clinton was responding to pressure from Teamsters, who didn’t want any new competition. He cited safety concerns — things like substandard drivers and vehicles — which to this day have never been supported by evidence.


(more…)

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