Mexico's Respectable Trade Retaliation

[AlphaCentauri]

Mexico announced, effective March 19, tariff increases ranging between 10% and 45% on 90 products whose imports from the U.S. amount to $2.4 billion. This was done because President Obama earlier in the month signed a spending bill that removed funding for a pilot program that allowed designated Mexican trucks to bring cargo directly to destinations in the U.S. Mexico's retaliation was neither rash nor hurried in that this issue has been in dispute since 1995.

The U.S. government agreed in the North American Free Trade Agreement to allow Mexican trucks to bring cargo to destinations in the four border states (California, Arizona, New Mexico and Texas) in 1995, and this action was "delayed" at the urging of the U.S. Teamsters Union.

The U.S. commitment to allow Mexican trucks to bring cargo to destinations throughout the U.S. in 2000 was not honored either. The argument made by the Teamsters Union and the U.S. government was that Mexican trucks and drivers did not meet U.S. safety standards. This announcement about safety concerns was made at the last minute and nothing was done to deal with this alleged defect during the six years after the North American Free Trade Agreement went into effect on Jan. 1, 1994.

The arrangement that has long been in place is for Mexican trucks to bring cargo to designated commercial zones at or near the border, then have the trailer with the cargo unloaded by a drayage truck and reloaded on a U.S. truck to carry the load to its destination. To deal with the dispute, Mexico requested an arbitration panel, the process set up in NAFTA to deal with such problems.

The five-member panel, chaired by a Briton with two panelists each from the U.S. and Mexico, voted unanimously in 2001 that the U.S. had violated its obligations and authorized Mexico to retaliate. Mexico refrained because it did not want to get into a tit-for-tat trade restriction fight with its much more powerful neighbor. Some 80% of Mexican merchandise exports normally go to the U.S., whereas Mexico now receives about 12% of total U.S. exports of goods, making the economic risks in a trade fight much higher for Mexico.

A modest pilot program was put into effect in September 2007. Twenty-six Mexican carriers with 103 trucks signed up to bring cargo to U.S. destinations as a way of testing the safety of these trucks in actual operations. In the subsequent 18 months, Mexican trucks made a reported 45,000 border crossings with no significant accident.

The U.S. Department of Transportation and an independent evaluation commissioned by the department both reported that the safety and out-of-service record of the Mexican long-haul trucks was superior to that of U.S. trucks.

http://www.forbes.com/2009/03/19/us-mexico-trade-opinions-contributors-trucks.html

[cliffordu]

1. We need to up the tarriff on the automatic weapons, then...

:sarcasm:

[Hello_Kitty]

2. I hear about these "trade wars" all the time but when is the U.S. actually going to start fighting?

Seems like other countries are free to be as protectionist as they want but let us do something to protect jobs and industries here and we're the villians.

[fasttense]

3. Forbes magazine is not noted for providing an unbiased opinion.

And they usually side with business against labor. So, I seriously questions its supposed facts like:

"The U.S. government agreed in the North American Free Trade Agreement to allow Mexican trucks to bring cargo to destinations in the four border states (California, Arizona, New Mexico and Texas) in 1995, and this action was "delayed" at the urging of the U.S. Teamsters Union."

We all know just how fair and pro-labor NAFTA is - not. So this agreement with Mexico to allow their trucks in the US is questionable. Was it a last minute clause thrown in by corporations to break the backs of the Unions?

According to Forbres it's A OK to make a deal or even have a war for oil corporations, just don't do anything for labor. Besides was it just the Teamsters who didn't want Mexico's trucks moving freight in the US? Seems to me there were a bunch of anti-immigrant right-wing nuts who didn't want it either. So was it more likely to have been delayed to support the Republicon's base or to support the Teamsters?

Here's another Forbes 'fact':

"The U.S. commitment to allow Mexican trucks to bring cargo to destinations throughout the U.S. in 2000 was not honored either."

That's the very next line of the article after it blamed the Teamsters for a delay in 1995. So, Forbes jumped over five years and suddenly the NAFTA agreement to let limited Mexican trucks into certain states has morphed into a US Commitment to allow Mexican trucks throughout the country.

Sounds like this is more a policy than a NAFTA agreement. So where and when did this policy change from a limited agreement to a Nationwide program? Could the bush administration have had a hand in it or did it just change all by itself? Forbes is hiding a lot of information in their supposed facts.