Stuck in Neutral on Mexican Trucking

Mexican President Felipe Calderon is in town today on a state visit. He’ll bring a full slate of issues to discuss with President Obama. One expects he’ll raise the issue of Mexican trucking yet again, with hopes that someone senior in the Administration will provide more details on how we’re going to find resolution on it and remove the pernicious retaliatory tariffs that Mexico has (entirely within their rights under NAFTA, mind you) put on $2.4 billion worth of U.S. exports, the overwhelming majority on manufactured goods.

However, as noted earlier this week in this blog, despite repeated assurances by Transportation Secretary LaHood and other senior officials that some kind of proposed solution that will make everyone happy is imminent, we don’t expect to see any major breakthrough during President Calderon’s visit.

An earlier blog post charted Transportation Secretary LaHood’s exchanges with Sen. Patty Murray (D-WA) earlier this month and in March, where he told her that a proposal was “closer than soon” to being shared with Congress. We’ve heard that before.

According to Inside U.S. Trade [subscription], U.S. Trade Representative Kirk yesterday “expressed doubt that there would be a concrete U.S. proposal on solving the trucking dispute this week. He told reporters after a speech that he did not know if there would be a “deal” on trucking this week. “But I do know that [Transportation] Secretary Ray LaHood continues with work with Congress and others to see if we can find a way forward, ” he said.

And then, yesterday at a White House press briefing, we had this less-than-reassuring exchange:

Q: You mentioned the four meetings that the two Presidents have had. At each of those President Obama has pledged to resolve the trucking issue in accordance with the NAFTA treaty. Can you update us on what progress has been made, and just talk more generally about the trade issues that will be at the summit?

SENIOR ADMINSTRATION OFFICIAL: Certainly. And as I noted, kind of the economic competitiveness and mutual economic growth are things that we very much expect to discuss — the President discuss with President Calderón and the two teams to have an opportunity to exchange views and see how we can work together to reach a goal that both Presidents have very clearly laid out in their own countries to revitalize economic vitality and job creation in both countries.

On the specific question, you are correct that in April and in August, when the Presidents met, they discussed the issue of Mexican trucking. Fully expect the issue to be part of tomorrow’s conversation. And I think the President will confirm his commitment to work with the Calderón government and with Congress to address the legitimate concerns that exist regarding the Mexican trucking program, while also abiding by our international obligations.

It is an important issue. We recognize its importance to President Calderón and to the relationship. And undoubtedly, the two Presidents will have an opportunity to get into that issue and continue working to resolve it.

Q Well, if I can follow on that, though, the word we’re hearing from Mexico City is that they’ve heard those words before. They don’t see any action. I mean, what can the President offer beyond just yet the same promise once again?

SENIOR ADMINSTRATION OFFICIAL: I guess — I’m not going to get out in front of a conversation that the President is going to have to tomorrow with President Calderón on this issue. Again, we recognize, the President recognizes the importance of this issue for President Calderón and for Mexico. And I think I laid out pretty clearly how — the President’s commitment to continue working forward to find a solution that takes into account the interests and concerns of all stakeholders.

The two Presidents have met four times over the past 15 months or so. The trucking issue has been raised at each meeting. Note the questioner’s follow through – “they’ve heard those words before.” We all have heard that a proposal to fix this is coming soon. However, U.S. manufacturers continue to face punitive tariffs on hundreds of products they ship to Mexico every day. Some of those manufacturers have already shut down U.S. assembly lines and moved their production to Canada, Mexico or other countries – exporting jobs instead of products.

Others are still paying the tariffs to maintain their market share in Mexico – money that could be far better spent on creating new jobs, increasing investment in their business, or expanding to other markets. Many of those manufacturers have indicated that, 13 months after the tariffs were first imposed, they will now begin to shut down U.S. production rather than continue to pay the tariffs – so we can expect the pain to spread from their bottom line to the unemployment line.

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