Tag: Felipe Calderon

Belated U.S.-Mexico Truck Deal Could Lift Tariffs, Boost Exports

President Obama and Mexican President Felipe Calderon announced a tentative agreements Thursday under which the United States would finally implement the cross-border trucking program required by U.S. signing of the North American Free Trade Agreement. The announcement is excellent news for U.S. farmers and manufacturerers whose products have suffered from retaliatory tarifs from Mexico.

As the National Association of Manufacturers’ Aric Newhouse said in a statement: “The United States is a global leader in ensuring enforcement of trade laws, and we need to lead by example – by coming into compliance with our NAFTA obligations on Mexican trucks. The NAM has led the effort in urging the Administration to reach an agreement to end these costly tariffs.”

Houston Chronicle and San Antonio Express News, “Deal would lift U.S. roadblock on Mexican trucks,” quotes two Texas business leaders talking about the positive, practical implications of the agreement.

“More than 15 years ago NAFTA was signed declaring free trade and removing obstructions to the flow of goods between Mexico and the United States,” Jeff Moseley, president and CEO of the Greater Houston Partnership, said in a statement. “With the compromise announced today, the full potential of NAFTA can come to fruition and Houston can hopefully grow its annual trade with Mexico currently at $16.2 billion.” …”We are pleased,” said Free Trade Alliance San Antonio president and CEO Kyle Burns. “It is unfortunate that it took billions of dollars in retaliatory tariffs to force the U.S. government into living up to its international obligations.

“We are hopeful that this latest program will lead to the successful conclusion of this issue, which should have been fully implemented in 2000. Mexico is showing good faith in our efforts. It is now up to the United States to follow through on our latest commitments and stop hiding behind safety concerns that are unfounded, as the initial pilot program proved.”

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Mexico’s Calderon Comes to Town, as Trucks Still Stalled

Mexican President Felipe Calderon is in town this week for a brief visit. Mexico is building toward its Presidential elections in July 2012, and the U.S.-Mexico relationship is always an issue in the election there as well as here. We don’t expect the lingering inability of the Obama Administration to resolve the NAFTA cross-border trucking dispute to be top of President Calderon’s list, but it will be up for discussion.

To recap, briefly: In the North American Free Trade Agreement, the United States signed on to allow cross-border trucking. As long as they meet U.S. safety and driver standards, Mexican and Canadian trucks under NAFTA should be able to cross the U.S. border, drop cargo and return home with cargo. They can’t engage in domestic deliveries. U.S. trucks are supposed to have the same rights. However, while this is in place between U.S. and Canada, implementation has been blocked for years between the U.S. and Mexico. Mexico won a NAFTA dispute settlement years ago, but declined to impose the retaliatory tariffs allowed by that process.

Until two years ago, that is, when Congress ended a pilot program for cross-border trucking and President Obama signed off on it. As a result of this, Mexico imposed retaliatory tariffs on billions of dollars worth of U.S. manufactured and agricultural exports. It has been nearly two years since this happened, and the Obama Administration has only very recently (January 2011) issued a “Concept Document” that lays out a foundation for discussions on re-establishing cross-border trucking. Little more has happened since that document was released, however, other than some “technical discussions.”

The Mexican government has indicated it is discussing the issue in good faith and that their U.S. counterparts are working hard. This is good news. However, the tariffs remain in place, harming American manufacturers who cannot ship their products to one of their largest markets without a massive markup that prices them out of the market. Many of these exporters are small & medium manufacturers – more than 90 percent of U.S. exporters to Mexico are SMMs. And waiting in the wings is a rotation of products on the retaliation list. We haven’t seen that list, but last time it was rotated, it put the bulls-eye on some major U.S. agricultural products, including pork and apples. Our bet is the next time it rotates, it’s going to focus squarely on manufactured goods instead. There’s not a lot of time left before we see this happen. We urge Secretary LaHood and his interagency team to buckle down and finish up their discussions. Tens of thousands of American jobs are at stake.

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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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Mexican Trucks, an Update (But Not Much of One)

Will Mexican President Felipe Calderon mention the cross-border trucking dispute at his 11 a.m. speech to a joint session of Congress? If he does, it will be the first specific reference to the issue we’ve seen from Mexico’s President and President Obama thsi week.

Yes, there are many, many important bilateral issues that President Obama and President Calderon needed to discuss —  the illegal drug trade, border violence, immigration. But it would have been nice if the word “trucking” had come up at least once, that is,  if there had been a straight-forward acknowledgement of the impact of the Mexican tariffs imposed on U.S. manufacturing and agricultural products in retaliation for the U.S. violation of NAFTA on cross-border trucking.

TruckingInfo.com, the website of the Heavy Duty Trucking Magazine, reported:

Although observers had widely expected the issue of cross-border trucking to be addressed this week during Mexican President Felipe Calderon’s visit to Washington, D.C., the issue was only alluded to in remarks and statements by Calderon and President Obama following yesterday’s meetings.

Instead, immigration reform and Mexico’s battle against drug gangs seemed to dominate.

Presidents Obama and Calderon issued a joint statement after their meeting Wednesday that did not specifically mention cross-border trucking but did talk about the importance of “creating a border for the Twenty-First Century” and to look at ways to “facilitate the secure, efficient, and rapid flows of goods and people and reduce the costs of doing business between our two countries.”

The Washington Times reported in the last paragraph of its story:

While the leaders alluded to ongoing trade disputes – such as the U.S. refusal to allow Mexican trucks on American roads, despite the North American Free Trade Agreement – no resolution was announced. Instead, they promised to continue to work through economic sticking points.

Businesses have closed and U.S. exporters have lost market share in the 13 months since Mexico imposed tariffs on U.S. products — $2.4 billion worth of products. Before you can solve this problem, you need to acknowledge it as a priority. So far, that hasn’t happened during President Calderon’s state visit.

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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. (continue reading…)

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Energy, the Economy on President Obama’s Canada Trip Agenda

The White House has now posted on its website yesterday’s briefing with Denis Mcdonough, Deputy National Security Advisor for Strategic Communication, on President Obama’s trip to Ottawa on Thursday. Deputy Press Secretary Bill Burton hosted the briefing, conducted by teleconference. Mcdonough:

There will be a lot of discussion of the economic recovery plan that the President is signing today, and the synergies of that plan with the stimulus package that Prime Minister Harper has proposed in Canada, as obviously both of them have infrastructure investment in clean and renewable energy and green jobs and tax cuts for working families.

They’ll also obviously be discussing, given the fact that Canada is the largest energy provider to the United States, our shared interest in energy and the environment, significant discussion of cooperation on clean energy technology. And the President is hopeful that they can — that he’ll be able to build on the very productive conversation he had with President Calderón of Mexico last month here in Washington, before he was sworn in, wherein he and President Calderón talked about possibilities for carbon abatement, clean energy technology, and a partnership among the three North American countries on those issues.

Carbon abatement — wonder if that signifies opposition to Alberta oil sands.

White House advisors Larry Summers and Carole Browner will be along on the trip.

Thanks, by the way, to the White House for getting the briefing up just a day after it was conducted. We’re still waiting for last week’s briefings from the press secretary, Robert Gibbs. And that’s not a snide remark. We sincerely want to read them — Friday’s looked interesting — and are mystified as to what’s taking so long. Transparency, transparency, transparency.

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Exports, a Key to Reviving the Economy

A McClatchy newspapers’ story, “With U.S. economy stuck, economists look abroad for growth“:

WASHINGTON — As U.S. consumers stop spending and investors keep their money to themselves, government and business leaders hoping to get the country’s ailing economy moving again are playing one of their few remaining cards.

They’re trying to sell more U.S. goods overseas despite the decline of both global demand and U.S. competitiveness.

Exports currently make up about 13 percent of the country’s total economic activity, far less than the 70 percent taken up by production for domestic consumption. But that’s where economic growth can still happen, analysts say, especially as the domestic housing and credit crises promise to freeze spending at home for at least another year.

Economists and business leaders suggest the incoming Obama administration implement export-friendly measures such as streamlining U.S. customs operations, negotiating more free trade agreements and developing industries such as alternative energy that can become the next generation of U.S. economic powerhouses.

We see President-elect Obama is meeting with Mexico President Calderon today, and we trust the campaign malarky of renegotiating NAFTA has been shelved. Given the state of the economy, let’s shelve lots of the more burdensome, anti-competitive, economy-slowing policies that were bandied about during the Democratic primaries.

The New York Times suggests caution will, indeed, be the byword in the early days of the new Administration. From “Economy May Delay Work on Obama’s Campaign Pledges“:

Although Mr. Obama has not publicly identified which priorities will have to wait, advisers and allies have signaled that they may put off renegotiating the North American Free Trade Agreement, overhauling immigration laws, restricting carbon emissions, raising taxes on the wealthy and allowing gay men and lesbians to serve openly in the military.

And the Employee Free Choice Act, too, right?

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