The Dallas Morning News on Sunday does its own story on the anniversary of Mexico’s tariffs retaliating against the United States for violating NAFTA, also reporting on Brazil’s WTO-sanctioned tariffs retaliating against the U.S. cotton program, “Companies caught in the middle of U.S.-Mexico trucking dispute“:

“We have heard from American exporters,” U.S. Trade Representative Ron Kirk said Tuesday. “We understand the sense of urgency. We will work as quickly as we can to see if we can’t come up with an acceptable solution.”

Transportation Secretary Ray LaHood has assured exporters that he’s hopeful a deal can be reached soon. But he said the same thing a year ago.

“We have not yet floated any proposals with Mexico and look forward to consulting with members of Congress,” the department’s Federal Motor Carrier Safety Administration said Thursday in a statement.

The Mexican embassy in Washington issued a news release last week:

We continue to seek every opportunity for dialogue and engagement with the Administration and Congress on this issue, and we urge the former to come forward with a specific proposal to resolve the cross-border trucking impasse.

In the meantime, Mexico will continue to exercise all legal means available to achieve full compliance by the United States with its commitments under the NAFTA. The safety of Mexican carriers and drivers operating in the United States has been well documented by an Independent Evaluation Panel, the Inspector General of the U.S. DOT and the Congressional Research Service. Mexico is the United States’ second-largest export market and the second largest buyer of US exports. It remains a steadfast supporter of free and fair trade, and will continue to work actively and responsibly with Congress and the Administration to find a solution.

The Morning News story highlights the impact of the Mexican and Brazilian tariffs on Texas-based Mary Kay, the personal care products company that has paid $5.4 million in Mexican tariffs over the last year.

As for the Brazilian retaliation…

• Bloomberg, “Brazil Raises Tariffs on U.S. Goods, to Break Patents“
• Capital Press, “Brazilian tariffs could stall exports,” reporting on the consequences to the ag sector.
• The Economist, “Picking a Fight“

Here’s the list of U.S. products and tariff percentages applied by Brazil, from the Brazilian Embassy. We’ll also put the list in the extended entry section below.

U.S. trade in manufactured goods continued to improve in January 2010, according to the Commerce Department’s trade data released today. The seasonally-adjusted manufactured goods trade deficit decreased slightly in January compared to December 2008, and stood at -$28 billion, or an annual rate of -$337 billion. That stands in sharp contrast to the peak manufactured goods deficit of $520 billion in mid-2006.

Seasonally-adjusted January data show that U.S. exports of manufactured goods were $80.3 billion, up 16 percent over January 2009. Manufactured goods imports were $108.3 billion, up 6.5 percent from last January.

America’s manufacturers continue to account for about 60 percent of U.S. exports of goods and services, so the recovery in manufactured goods exports is good news for the economy and for future job prospects. While the recovery is taking place at a rapid pace, manufactured goods exports are still nearly 20 percent below their July 2008 peak.

The rate at which exports are now expanding puts us in good shape to launch the effort the President has called for to double U.S. exports in five years. That translates into an ambitious 15 percent a year growth rate, and achievement of the goal will require far-reaching changes in U.S. trade policy to open foreign markets more rapidly - particularly through an ambitious program for bilateral trade promotion agreements. An ambitious Doha Round, additional steps to bolster U.S. competitiveness, and other major steps will be needed as well.

A lot of news coverage of the U.S.-Mexican truck issue a year after Mexico imposed retaliatory tariffs against U.S. farm and manufactured goods:

• Houston Chronicle, “US working to resolve border trucking dispute“
• CNN International, “Mexico to US: Allow cross-border trucking“
• Reuters, ”Obama criticized for Mexico, Brazil sanctions“
• Consumer Electronics Association, “CEA Urges Reauthorization of US-Mexico Trucking Program“
• The Hill, “War over fries“
• American Frozen Food Institute, “American Frozen Food Institute Urges White House and Congress to Resolve …“
• Wall Street Journal, “Mexico Tops List of Trade Issues Facing White House“

The Journal piece is based on the Q&A from U.S. Trade Representative Ron Kirk after his speech at the National Press Club Tuesday:

WASHINGTON—The Obama Administration’s top trade negotiator said the U.S. was working quickly to resolve a damaging trade spat with Mexico, one of several obstacles to the president’s goal of doubling U.S. exports within five years. 

“We understand the sense of urgency,” said U.S. Trade Representative Ron Kirk after a speech at the National Press Club.

It has been one year since Mexico imposed the retaliatory tariffs, so somewhere along the line that sense of urgency has been lost.

Ambassador Kirk’s prepared remarks did not add anything to his testimony last week on the Administration’s trade agenda, but that’s understandable. President Obama speaks at the Export-Import Bank’s annual conference on Thursday, and you wouldn’t want to overforeshadow your boss.

Today we mark the anniversary of the imposition of retaliatory tariffs on a wide range of U.S. manufactured exports to Mexico. As a result of Congress yanking funding for a pilot program to demonstrate the safety of Mexican trucks operating in the United States –- and the program’s interim report showed they’re just as safe as U.S. trucks — $2.4 billion worth of U.S. exports to Mexico, ranging from grapes to dog food to refrigerators, have spent the last year facing high tariffs that have priced them far above similar products sold in Mexico by our competitors around the world.

This may not seem like an enormous issue, in the grand scheme of things, but it is real jobs that have been lost, real communities that in some cases have lost the major employer, and it is small and medium manufacturers (SMMs) who have been hit hard in particular. Over 95 percent of the firms that export to NAFTA are SMMs, and for many of them, loss of Mexico as an export market could be the difference between viability and closing up shop.

The National Association of Manufacturers has studied the impact of these tariffs, and found that about 16,000 U.S. manufacturing jobs have either been lost or are at risk of being lost as a result of their levy. Sixty-five percent of the targeted items are manufactured goods, including chemicals, paper and printed materials, household and personal care products, machinery, and processed food products.

There are three ways you can deal with these tariffs, and we’ve seen manufacturing in America try all three. You can shut down your U.S. production and move it to Mexico, Canada, or another country. That has happened. You can try and stick your Mexican distributors with the cost of the tariff. You can try to do that, but in many cases they’re just finding new suppliers from other countries, and the U.S. market share is dropping. Or, you can eat the tariffs as part of your cost of business. Adding a 20 percent tariff to your costs to try and preserve market share is, at best, a short-term solution that leads to loss of profits. Do it long enough, and you’ll be searching for alternate production lines in countries where they don’t face tariff retaliation. This takes the pain from the bottom line to the unemployment line, and it’s something many U.S. companies – after an entire year of facing such tariffs – are beginning to do. The situation is only going to grow worse in the coming months.

U.S Trade Representative Ron Kirk appeared before the Senate Finance Committee Wednesday to formally present the President’s 2010 Trade Policy Agenda, and as expected, express support for passage of the three long-pending free trade agreements (FTAs) with Colombia, Korea and Panama were high on the agenda for Senators.

“The FTA’s are a priority,” Kirk told the lawmakers. “We have not given up on any of those.” (Kirk’s statement.)

The ambassador was challenged by both Chairman Baucus and Ranking Member Grassley, who warned him that the United States will lose out to our competitors in Europe and other nations if we don’t advance the pending FTAs with Colombia, Korea and Panama. The goal of doubling exports in five years will be strongly aided by passing these pending FTAs, Kirk heard more than once.

As far as that competition from Europe and other countries, the European Union is certainly not letting any grass grow under its feet. On Tuesday, the EU announced the start of FTA negotiations with Vietnam. On Wednesday, the EU announced the start of FTA negotiations with Singapore. And, of course, the EU is looking to enact its FTA with Korea in the next few months.

The U.S. has an FTA with Singapore, and Vietnam would be included in the Obama Administration’s proposed Trans-Pacific Partnership (TPP) FTA –- the first round of negotiations for the TPP begins in mid-March.

This news all comes on the heels of the announcement by the EU Tuesday that it has concluded its FTA negotiations with Colombia and Peru, and is looking to a May 2010 signing with entry into force by 2012.

Colombia is also nearly finished negotiating an FTA with Canada.

Canada, by the way, is negotiating an FTA with the European Union. And, of course, Canada and Korea are negotiating an FTA too.

There seems to be a trend here: Strong manufacturing countries, whose industries compete with manufacturing in America for exports to these markets, are all fiercely pursuing trade deals with the same group of nations. If past trends continue, once they conclude negotiations, Europe and Canada will move quickly to enact these agreements. So will Peru, Colombia, and Korea.

A bipartisan group of House members — 27 Democrats, 29 Republicans — have sent Transportation Secretary Ray LaHood and U.S. Trade Representative Ron Kirk a strongly written letter demanding action and accountability on Administration’s plans to resolve the dispute over Mexican trucks on U.S. roads. “The current situation is unsustainable and untenable,” they write.

Not just the inaction, but the Administration’s failure to match words with deeds that frustrates the House members. Last March, Mexico hit more than 90 U.S. manufactured and agricultural goods with tariffs ranging (mostly) from 10 to 45 percent in retaliation for the U.S.’s failure to abide by its trade commitments on cross-border trucking. (See WSJ, Reuters.)

From the letter:

We are writing to express our concern about the lack of action and transparency by the United States Trade Representative and the Department of Transportation to address tariffs imposed by Mexico on U.S. agricultural and manufacturing products in response to the removal of the cross-border trucking pilot program. These tariffs have had a devastating impact on our local industries and area economies. Therefore, given the importance of this matter to our constituents, we urge you to immediately implement a plan of action to rectify this situation. …

Over the past 11 months, Administration officials have repeatedly expressed confidence that a resolution ot the current dispute could be found that would fulfill our obligations to Mexico under the North American Free Trade Agreement. President Obama expressed his commitment to resolving the issue to President Calderon during their meeting in Guadalajara, Mexico in August, 2009. However, to date, the Administration has not shared any of the principles or the parameters of a proposed plan.

The House members “implore” the LaHood and Kirk to work toward a quick solution, and they ask the officials to communicate their plans for resolving the issue.

The White House today released the President’s 2010 Trade Policy Agenda. The report is here and U.S. Trade Representative Ron Kirk issued a statement,”President’s 2010 Trade Policy Agenda Focuses on Growing American Jobs Through New Market Access and Enforcing Trade Rules.” The USTR bold-faced this paragraph in Ambassador Kirk’s statement:

“Ninety-five percent of the world’s consumers live outside the United States, and the President’s trade agenda will help to get American workers and businesses access to as many of those customers as possible - in ways that affirm our rights in the global trading system and that reflect American values on worker rights, the environment, and open dialogue here at home,” said Ambassador Kirk. “The priorities in this Agenda can work to strengthen the rules-based global trading system on which the nations of the world depend, while opening markets and ensuring that American businesses and workers receive the economic benefits of trade.”

Agreed.

The President’s Trade Policy Agenda is part one of the report. On the pending Free Trade Agreements with Panama, Colombia and South Korea, the report again offers the Administration’s general, but non-committal support that might lead to enacting the agreements, perhaps.

If these outstanding issues can be successfully resolved, we will work with Congress on a timeframe to submit them for Congressional consideration so our producers can take full advantage of the opportunities presented by these agreements.

Nothing new there, really.

UPDATE (2:15 p.m.): CQ Politics reports, “Little Indication of Movement on Stalled Trade Deals.” Unfortunately so.

The results are in, the judges have made their decision, and the results are final.  U.S. Free Trade Agreements (FTAs) for the second year in a row have turned in a trade surplus for U.S. manufactured goods.  U.S. manufactured goods exports to NAFTA, CAFTA, and the other FTAs exceeded imports by $21 billion in 2008 and extended their surplus to $26 billion in 2009 –- starkly visible in the graph below.

This two-year surplus of nearly $50 billion is pure gold when viewed against the distressing $1.4 trillion dollar deficit for U.S. overall trade in goods and services during that period.  What a great record for U.S. Free Trade Agreements – the brightest spot in the U.S. trade picture!

This reality stands in sharp contrast to what the trade naysayers have been telling Congress, blaming trade agreements as the reason for the trade deficit.  Well, the score is in, the facts are now known, and the deficit is with the countries that DON’T have trade agreements with the United States.

Hopefully winning the “Trade Olympics” gold medal will catch Congress’ attention so they will focus on reality rather than the mythology that has been handed to them for years – and will take up and pass the three pending trade agreements with Colombia, Korea, and Panama.

Thousands of Americans are out of work today rather than being employed by America’s manufacturers who would have expanded sales, production, and employment opportunities if Congress stopped insisting that we should continue to have to pay high tariffs to sell in those countries.

Frank Vargo is NAM’s vice president, international economic affairs.

An interesting juxtaposition in today’s New York Times, which reports in separate on the manufacturing sectors of major U.S. competitors, China and Germany.

“Defying Global Slump, China Has Labor Shortage:

Some manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices. Such increases would most likely drive up the prices American consumers pay for all sorts of Chinese-made goods.

Rising wages could also lead to greater inflation in China. In the past, inflation has sown social unrest.

“Germany’s Export Prowess Weighs on Euro-Zone,” using the Frankfurt company Glasbau Hahn, a small manufacturer of high-cost museum display cases, to illustrate the power of Germany’s export-driven economy.

Glasbau Hahn is a miniature multinational company, generating more than 60 percent of its sales abroad and dominating its narrow but lucrative niche: the global market for museum display cases. Even King Tut’s mummy lies in a climate-controlled vitrine made in Glasbau Hahn’s workshop, which sits next to a railyard and across the street from a Fiat showroom.

And …

Glasbau Hahn helps explain why Germany is so competitive. The company and those similar to it are sometimes called hidden champions. They learned long ago to compensate for slow domestic growth by expanding overseas. And to offset the high cost of labor in Germany, they concentrate on premium products that customers are willing to pay more for.

But consumer borrowing and buying in the EU’s importing countries like Greece, Spain and Portugal have caused serious economic problems.

Vice President Joe Biden today issued the first annual report of the Middle Class Task Force, reaching the pre-ordained conclusion that the middle class needs more government programs and financial support.

The task force did spend a lot of time talking about the manufacturing sector, efforts recounted starting on page 13 of the report. Two of the task force’s meetings during the year emphasized manufacturing, the first in Perrysburg, Ohio, and then a White House meeting in December.

Looking ahead, the Vice President and Task Force intend to work with the agencies and with Senior Counselor Bloom to continue to promote the Administration’s manufacturing agenda. Policies in this space may include: export promotion, transitional assistance to supply chains (especially former auto suppliers), public/private partnerships (especially in green manufacturing), and continuing to build off of the ARRA investments noted above.

There’s much to welcome there policywise, and we’re glad to see export promotion head the list.

The Middle Class Task Force report also extensively promotes “green jobs” and the “green economy.” Coincidently, The Washington Post today runs an op-ed by Sunil Sharan, an expert in the “smart grid” and other clean-energy developments. Using the example of “smart meters” — the retail, consumer portion of smart grid technology — he concludes that the technological advances probably result in net job destruction. He concludes:

For the purpose of creating jobs, then, a “clean-energy economy” will not offer a panacea. This does not necessarily mean that America should not become green to alleviate climate change, to kick its addiction to foreign oil or to use energy sources more efficiently. But those who take great pains to tout the “job-creation potential” of the green space might just end up inducing labor pains all around.