Tag: Bruno Ferrari

Cross-Border Trucking Dispute Remains Obstacle to U.S. Exports

Congress is awash in discussion of pork, i.e., appropriations and earmarks. We wish our elected officials would pay a little more attention to some REAL pork. From the National Pork Producers Council, “Mexican Trucking Dispute Hurting U.S. Pork“:

U.S. pork exports to Mexico have fallen by a whopping 20 percent since the Mexican government added pork to the list of U.S. products against which it is retaliating for the failure of the United States to live up to a trade obligation.

In August, Mexico put a 5 percent tariff on most U.S. pork imports, as well as tariffs on other U.S. products, in reprisal for the United States not complying with a provision of the 1994 North American Free Trade Agreement (NAFTA) that allows Mexican trucks to haul goods into America. The provision was supposed to become effective in December 1995.

The National Pork Producers Council has been urging the Obama administration to resolve as quickly as possible the trucking dispute, which first erupted in March 2009 when Mexico placed higher tariffs on an estimated $2.4 billion of U.S. goods after the U.S. Congress failed to renew a pilot program that let a limited number of Mexican trucking companies to haul freight beyond a 25-mile U.S. commercial zone.

Of course, it’s not only pork products, but a long list of U.S. agricultural and manufactured goods that have suffered from the retaliatory tariffs. Here’s the list. As the NAM’s Doug Goudie blogged back in August, the Mexican government plans to “carousel” or rotate the products on the tariff list.

And now the carousel is getting set to turn again. From Reuters, Nov. 11, “Mexico says “clock ticking” on U.S. truck row“:

YOKOHAMA, Japan, Nov 11 (Reuters) – Mexico will slap retaliatory tariffs on a new set of U.S. goods unless Washington moves to resolve a decade-old trucking dispute and the “clock is ticking” for action, Mexico’s economy minister told Reuters…. (continue reading…)

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The Impact of Mexican Tariffs on U.S. Manufacturing, Agriculture

Following up Monday’s announcement that the Mexican government would be “carousel-ing” some of the products targeted for retaliation under the cross-border trucking case, the official revised list was published this morning – and the new tariffs will take effect later this week.

The total value of the exports targeted by these tariffs is more than $2 billion in 2009 – which, you will note, was one of the worst years for American exports in a long time, given the impact of the recession. Based on 2008 figures, the value would be more than $2.5 billion.

In this spreadsheet we have highlighted the new products, the associated dollar value of Mexico’s imports from the U.S. for 2009, and listed the tariff percentage.

The biggest impact comes in new agricultural and processed food products. Manufacturing in America embraces many different sectors of production, and one of the largest and most important is the food processing industry. Here, we have seen the Mexican government impose tariffs of 10-20 percent on products like chocolate, ketchup, chewing gum and cheese — all products of the manufacturing sector, made in American factories by American workers.

At the same time, we see new tariffs imposed on other manufactured goods, including industrial polishes, adhesives, trench diggers, rubber gloves, floor coverings, stainless steel containers, and gas masks.

While the NAM is pleased to see a number of industrial products removed from the revised list – including carpets, telephones, metal furniture, and various paper products – the list of manufactured goods facing tariffs as a result of the Obama Administration’s lack of progress on resolving the cross-border trucking dispute remains long. Mexican school children will be paying more for their education this fall, given that printed exercise books, paints, ballpoint pens and pencils are on the list, facing 15 percent duties. Also still on the list are key home products like refrigerators, coffeemakers and dishwashers; consumer goods like toothpaste, deodorants, aftershave, and suntan lotion (and toilet paper); home furnishing goods including curtain rods and desks, and industrial goods including gas filtering machines.

All in all, it’s a cornucopia of American-made products facing punitive tariffs in Mexico this week. Not just manufacturing but farmers will feel the pain as well – the significant addition of pork, apples, oranges, sweet corn and grapefruits total well over $700 million in U.S. exports. But manufactured goods are hit, and hit hard. And hit just as hard are the American factory workers who make these products – most of which have a significant export market in Mexico, our second largest trading partner.

It’s past time to fix this problem and get our goods moving back over the border that we made duty-free in 1994 with NAFTA.

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U.S. Manufacturing Affected by Mexico’s Retaliatory Tariffs

From Bloomberg, “Mexico Puts Tariffs on Some U.S. Pork Cuts in Truck Program Retaliation“:

Mexico will impose import tariffs on some U.S. pork cuts, ketchup, cheeses, sweetcorn and some fruits because of the U.S. government’s failure to restore a program allowing Mexican trucks to operate north of the border, the nation’s official gazette said.

The list includes a tariff of 5 percent on some cuts of pork and as much as 25 percent on fresh white cheese, according to the notice. Onions, apples, pears, oranges, cherries, soy sauce, mineral water and sunglasses are also on the list.

Mexico’s official gazette lists all the products in Spanish. Media reports focus on the agricultural and retail products because consumers/readers can easily grasp the impact. The economic on manufactured goods could be as great or greater, however. Here’s Google’s translation of part of the list, including the percentage tariffs applied. Most of it reflects the original list of products announced in March 2009.

 We note the addition of heavy machinery, such as trenchers (8429.59.01), hit with a 15 percent tariff.  That’s a big ticket item which other countries such as Canada are more than eager to supply.

 

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In Seattle, a Topic Not Addressed: Cross-Border Trucking

Surprisingly, this week’s hot issue of retaliatory tariffs imposed by Mexico against U.S. farmers and manufacturers appears not to have been mentioned during the President’s trip to Seattle on Tuesday. At least the issue does not appear in any of the public comments.

Washington State agricultural producers have lost millions of dollars worth of sales because of Mexico’s tariffs against U.S. products imposed in retaliation for U.S. refusal to establish the cross-border trucking program required by NAFTA. Sen. Patty Murray (D-WA), for whom President Obama raised campaign funds on Tuesday, is leading the Congressional call for resolving the dispute.

Commerce Secretary Gary Locke, the former Governor of Washington, was also on hand.

But nothing in any of the public comments we see.

Well, maybe the issue arose in private conversations.

Earlier Shopfloor.org posts.

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Cross-Border Trucking: Mexico Retaliates with Tariffs on Pork

The President is expected to highlight export issues in Seattle today when he speaks with small business owners at 11:40 a.m. and then makes a statement to the press. (White House schedule.)

We’d be very surprised if he does not comment on Mexico’s announcement Monday of retaliatory tariffs being imposed on additional U.S. products because the United States is violating NAFTA provisions requiring regulated cross-border trucking.

The issue is especially timely because the President follows his meeting with business owners by attending a campaign fundraiser with Sen. Patty Murray (D-WA), one of the most vocal critics of U.S. inaction on the issue. Murray has demanded a solution to the problem by Oct. 1.

The Mexican government has imposed its tariffs with a keen political sense, hitting U.S. farm products in states like Washington, Idaho and California, and many manufactured goods — obviously the major concern of the National Association of Manufacturers. News accounts today highlight the additional tariffs on pork and pork products. From The Des Moines Register, Irritated Mexico increases tariffs on U.S. pork“:

Mexico added pork to a list of 99 U.S. products on which it is raising tariffs under the North American Free Trade Agreement, the National Pork Producers Council said Monday.

“Mexico’s retaliation against U.S. pork will have negative economic consequences for America’s pork producers,” said Sam Carney, a producer from Adair who is president of the pork council. “We are extremely disappointed that our top volume export market has taken this action, but we’re more disappointed that the United States is not living up to its trade obligations.”

The actual list of affected products won’t be known until its published in the government’s Official Gazette, but Bloomberg reports: “Fifty-four of the products that will be subject to tariffs will be agricultural and the rest will be manufactured goods, said the Mexican official who can’t be identified.

U.S. Trade Representative Ron Kirk expressed disappointment in a statement. The gist: We’re working on it.

(continue reading…)

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Cross-Border Trucking: Manufacturers Face Additional Mexican Tariffs

Mexico’s minister for the economy, Bruno Ferrari, has just announced the Mexican government will be adding to its list of U.S. products subject to retaliatory tariffs resulting from the United States’ failure to address the cross-border trucking dispute. While the exact products and changes aren’t official and won’t be for several days, the basic issue here is unchanged: The United States has violated the terms of a trade agreement, NAFTA, and thousands of U.S. manufacturing jobs are at risk because the Administration and Congress won’t take the necessary steps to put us in compliance.

President Obama and President Calderon met back in May and discussed this issue. I am certain at that time that President Calderon told Mr. Obama that, if this issue were not resolved in a timely fashion, additional tariff retaliation would be forthcoming. Now, almost two months later, we see that the retaliation is here. More manufacturing and farm products will be added to the list, which already impacts billions in dollars in U.S. exports. Some products will come also off the list — but the very fact that we are facing retaliation on American manufacturing firms and their exports is unacceptable. This issue can be resolved through careful cooperation between the Administration and Congress, and between the United States and Mexico. Transportation Secretary LaHood told Sen. Patty Murray (D-WA) more than two months ago that a solution was “closer than soon.” The only thing “closer than soon” now is additional tariff retaliation on more U.S. manufacturing.

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, 15 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.

It doesn’t have to be like this. There is no reason under the sun why we continue to face the tariff retaliation we’ve faced since 2009 — and certainly no reason for facing additional products being targeted. This new action should spur to Congress and the Administration to turn to negotiations and a solution as soon as the August recess ends. Manufacturing wants to double exports, increase jobs, and lead the economic recovery. Pursuing policies that do the opposite by leaving trade disputes unsettled are the wrong road to travel.

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