Keep on trucking (or not)

TK: Lobbyists within the industry and in other sectors are apparently working to see if the Obama Administration can provide a fix that will placate Mexico regarding the termination of funding for a pilot program that allowed Mexican trucks to operate beyond the border without going against the intent of Congress. In a time when specialty crop traders face enough obstacles already, this additional roadblock is an unwelcome aggravation, and - as some suggest - could be the start of a trade war with our southern neighbor. Yet there appears to be a stronger likelihood for a fix from the Administration, says this report from Bloomberg.


Here are some headlines from today about the issue:

Freight costs may rise after U.S. bans Mexican trucks Bloomberg

The toxic assets we elected Washington Post George Will

Congress, with the approval of a president who has waxed censorious about his predecessor's imperious unilateralism in dealing with other nations, has shredded the North American Free Trade Agreement. Congress used the omnibus spending bill to abolish a program that was created as part of a protracted U.S. stall regarding compliance with its obligation to allow Mexican long-haul trucks on U.S. roads. The program, testing the safety of Mexican trucking, became an embarrassment because it found Mexican trucking at least as safe as U.S. trucking. Mexico has resorted to protectionism -- tariffs on many U.S. goods -- in retaliation for Democrats' protection of the Teamsters union.
NAFTA, like all treaties, is the "supreme law of the land." So says the Constitution. It is, however, a cobweb constraint on a Congress that, ignoring the document's unambiguous stipulations that the House shall be composed of members chosen "by the people of the several states," is voting to pretend that the District of Columbia is a state. Hence it supposedly can have a Democratic member of the House and, down the descending road, two Democratic senators. Congress rationalizes this anti-constitutional willfulness by citing the Constitution's language that each house shall be the judge of the "qualifications" of its members and that Congress can "exercise exclusive legislation" over the District. What, then, prevents Congress from giving House and Senate seats to Yellowstone National Park, over which Congress exercises exclusive legislation? Only Congress's capacity for embarrassment. So, not much.


Lobbying effort to help Mexican vehicles keep on trucking CQ Politics

In the current economy, probably the last thing U.S. businesses want to deal with are slower sales but it looks like the roads not traveled by Mexican trucks have the potential to pull down those profits.
So a number of business groups are mobilizing a lobbying initiative to revive a program allowing Mexican truckers on U.S. highways, and in turn, reverse retaliatory tariffs that Mexico slapped on U.S. products this week.
Congress included language in the recent omnibus spending law (PL 111-8) to shut down a Bush administration pilot program that allowed approved Mexican trucking companies to send their vehicles beyond a narrow border zone.
Mexico complained that the action violated the requirements of the North American Free Trade Agreement (NAFTA, PL 103‑182) and imposed duties of 10 percent to 40 percent on U.S. goods.

The Mexican American War of 2009 The Washington Times

The Mexican trade war may just be getting revved up, thanks to the Obama administration and the Democrat-controlled Congress ending a Bush administration pilot program that allowed a limit of 97 Mexican long-haul truck drivers into the United States (whereas, under NAFTA, all Mexican trucks meeting reasonable road standards should have been allowed access). These 97 Mexican trucks passed U.S. safety inspections and in fact compiled a slightly safer record than U.S. trucks. With so few Mexican trucks and the short duration of the program the findings can't be said to be statistically significant. But shouldn't the encouraging results let the pilot program go on a little longer before making further decisions on Mexican truckers in contravention of NAFTA?
Unfortunately, that is not how the Teamster's Union reasons. The solution for the union and its supporters isn't to get more information, but simply to cover their eyes and ears and say that they want no more information. Instead, they use what seem like phantom safety concerns to argue we stop letting the 97 Mexican truckers into the U.S.
The Mexican government has shown remarkable restraint so far. Mexicans have had the legal right to impose sanctions for years due to our limiting of their trucks, and their recent 10- to 45-percent tariffs on 90-plus minor U.S. products in retaliation for the ending of the trucker pilot program have thus far avoided going after the major commodity of corn. In 2007, Mexico was a fairly close second behind Japan in buying our corn exports, buying 19 percent of the corn. One important reason: NAFTA got rid of protections on the corn market.
Why should farmers and producers of over 90 other products lose jobs to protect Teamster truck drivers and make consumers pay higher transportation prices?



From Grocery Manufacturers Association on March 24

The Grocery Manufacturers Association (GMA) today called on Congress to fully implement the North American Free Trade Agreement (NAFTA) and allow the U.S. Department of Transportation to fully implement its cross border pilot trucking program with Mexico.

“It is imperative that Congress fully implement NAFTA and allow the U.S. Department of Transportation to fully implement its cross border pilot trucking program with Mexico,” said GMA senior vice president and chief government affairs officer Mary Sophos. “Cancellation of the pilot trucking program as part of the 2009 Omnibus Bill has resulted in Mexico’s retaliation in the form of new tariffs including on food, beverage and consumer household goods. These retaliation tariffs will have a significant impact on our industry's ability to continue to gain fair access to the Mexican market. During these tough economic times, the American consumer can hardly afford additional costs from a retaliation effort on behalf of Mexico. We urge Congress and the Administration to fully implement the program and engage Mexico to develop a solution that swiftly resolves this issue.”

The North America Free Trade Agreement has been a success in terms of promoting bilateral trade between the United States and Mexico. From 1993 to 2007, total U.S.-Mexico trade has quadrupled, from $81 billion to $347 billion. Today, Mexico is our third largest trading partner after Canada and China.

Mexico is a top export market for many U.S. businesses and manufacturers, but especially so for the food and beverage industry. Mexico is the top export destination for U.S. beef, dairy, poultry, rice, soybean meal and oil, corn sweeteners, cotton, apples and dry edible beans. It is also a major market for corn, soybeans, eggs, vegetable oils, fresh U.S. potatoes, snack foods and other consumer-oriented agricultural goods.