From Reuters, “Mexico slaps tariffs on U.S. goods in truck feud“:

MEXICO CITY/WASHINGTON (Reuters) – Mexico slapped tariffs on 90 American agricultural and manufactured exports on Monday in retaliation for Washington’s move to block Mexican trucks from using U.S. highways.

Mexican Economy Minister Gerardo Ruiz said about $2.4 billion worth of exports from 40 U.S. states would be affected and that his government would soon publish a list of them.

Last week, the U.S. Congress canceled funding for a test program begun by the Bush administration that allowed Mexican long-haul trucks to circulate in the United States in compliance with the North American Free Trade Agreement.

“We consider this action by the United States to be mistaken, protectionist and clearly in violation of (NAFTA),” Ruiz told reporters in Mexico City.

More…

• Wall Street Journal editorial, “The Teamsters War“
• Wall Street Journal, Mary Anastasia O’Grady, “Washington Starts Another Trade War“

In related news, Brazil’s president issues a warning, “Lula Urges Nations to Avoid ‘Drug’ of Protectionism“:

March 16 (Bloomberg) — Brazilian President Luiz Inacio Lula da Silva said countries seeking to help their economies weather the global slump must avoid turning to protectionist policies.

“Protectionism is a drug that provides temporary relief, but in the end leads to major crisis,” Lula told investors in New York today.

In his latest Detroit News screed attacking critics of the Employee Free Choice Act, James Hoffa, president of the Teamsters, assumes his readers are historically ignorant. Or rather, stupid. He thinks you’re stupid.

Just recently a spokesman for one of the front groups called Employee Free Choice “a poison pill for our ailing economy.”

Those are the same arguments used by opponents of the Wagner Act. In 1935, Guy Harrington of the National Publisher’s Association said supporting the bill “would permanently close the door to recovery.”

The U.S. economy recovered after the Wagner Act became law in 1935. If the Employee Free Choice Act becomes law, I am quite confident the U.S. economy will return to health.

If you’re going to use a post hoc fallacy, try to get the chronology a little closer.

The Wagner Act passed in 1935. The nation plunged back into the depths of the Depression in 1937, with the consequences well summarized at the Wikipedia, “Recession of 1937“: “Unemployment jumped from 14.3% in 1937 to 19.0% in 1938. In two months, unemployment rose from 5 million to over 9 million, reaching almost 12 million in early 1938. Manufacturing output fell off by 40% from the 1937 peak; it was back to 1934 levels. Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937.”

The U.S. economy did return to health after passage of the Wagner Act, but it took World War II to get us there, and only after the war, 1946, did consumer spending and living standards return to pre-Depression levels.

There’s a Hoffa slogan for you: Pass the Employee Free Choice Act, and the economy will be healthy again in 2020!

It’s possible that some workers might gain higher wages and benefits if private sector unionization increases, but it will do nothing to ease unemployment. Raise the cost of labor and employers will hire fewer people. If you’re unemployed, the last thing you should want is passage of the Employee Free Choice Act.

We have evidence from history, including passage of Wagner Act.

From Amity Shlaes in the Wall Street Journal, “The Krugman Recipe for Depression“:

New Dealers raised taxes again and again to fund spending. The New Dealers also insisted on higher wages when businesses could ill afford them. Roosevelt, for example, signed into law first his National Recovery Administration, whose codes forced businesses to pay an above-market minimum wage, and then the Wagner Act, which gave union workers more power.

As a result of such policy, pay for workers in the later 1930s was well above trend. Mr. Ohanian’s research documents this. High wages hurt corporate profits and therefore hiring. The unemployed stayed unemployed. “If you had a job you were all right” — the phrase we all heard as children about the Depression — really does capture the period.

Another Hoffa slogan: Pass the Employee Free Choice Act, if you have a job, you’ll be all right. If not….

AP, “Administration to reinvent Mexican truck program“:

WASHINGTON (AP) — The Obama administration will try to reinvent a program to allow Mexican trucks full access to U.S. highways.

An 18-month-old pilot program that allowed a few Mexican trucks beyond a border buffer zone died when President Barack Obama signed a sweeping $410 billion government spending bill on Wednesday. The bill barred spending on the pilot program.

A spokeswoman for the Office of the U.S. Trade Representative, Debbie Mesloh, said Obama has told the office to work with Congress, the Transportation and State departments and Mexican officials to come up with legislation to create “a new trucking project that will meet the legitimate concerns” of Congress and U.S. commitments under the North American Free Trade Agreement.

That statement presumes it was “legitimate concerns” of Congress that led to the program being killed. And presumes that you can reconcile those “concerns” with the U.S. NAFTA commitments.

But the braking force was organized labor, wasn’t it? Since the Teamsters are fundamentally opposed to NAFTA, there’s no reconciling to be had. And the United States adds more evidence to its reputation as being an unreliable trading partner.

(Hat tip: Brian Faughnan, who comments, “Mexico is within its treaty rights to retaliate, and they’re likely to begin the process before long. Without even addressing the issue, Obama has soured relations with one of our most important trading partners and energy suppliers.” Well, to be fair, the last in a long line of sour-ers.)

In pushing the Employee Free Choice Act, organized labor says they are trying to protect employees against being threatened and silenced by employers.

And if you disagree, they threaten and try to silence you. The latest:

Teamsters President Urges Local TV Stations To Pull Commercials

WASHINGTON, Feb. 13 /PRNewswire-USNewswire/ — Teamsters General President Jim Hoffa today said that anti-union commercials running on local television stations are false and should be taken down.

Anti-worker groups funded by big corporations are spreading misinformation about the Employee Free Choice Act, which is expected to be introduced in Congress soon.

A corporate front group called the “Employee Freedom Action Committee” paid for blatantly false television commercials in Arkansas, Nebraska and North Dakota.

“These ads are dishonest and should be taken down now,” Hoffa said. “It does not serve the public interest to run commercials that lie about legislation important to working families. These ads are funded by big corporations that don’t care about employee freedom, they just care that their employees don’t join unions

Rather than engage in the debate, Hoffa tries to browbeat others into silencing his opponents. It’s no wonder workers fear the Employee Free Choice Act and the loss of the secret ballot. The secret ballot protects them from union organizers whose method of operation is shouting, censoring and bullying.

In the last few weeks we’ve seen the head of Change to Win threaten companies with political retaliation if they oppose the Employee Free Choice Act, and the head of the United Auto Workers play the race card to silence his critics. Now the Teamsters’ Hoffa wants opponents to be kept off the airwaves.

Fundamentally, these union leaders have a real problem with freedom.

The Washington Times today reports on what it sees as waning support for quick Congressional action on the Employee Free Choice Act, the anti-democratic legislation that would dragoon employees into unions against their will.

The thesis is that the political and economic scenes are such that Congress will be reluctant to move on the bill, organized labor’s top priority. From “Labor’s ‘priority’ on back burner“:

“I suspect that there’s been a bit of a rethink going on,” said Seth Borden, a labor-law attorney representing management groups at Kirkpatrick Stockton. “A lot of the enthusiasm – and fear, on our side – has tempered off a bit.”

Both sides say the sharply deteriorating economy, coupled with such big-ticket items as health care reform and energy policy, will command the attention and resources of both the new administration and key congressional committees. With business lobbies and conservative Republicans geared up to fight EFCA, the Obama administration is seen as not wanting a distraction in his critical first days in office.

“We’re hearing [EFCA] probably won’t happen right away, and we feel good about that,” said Leigh Strope, spokeswoman for the International Brotherhood of Teamsters union. “It maybe will not happen in the first 100 days, but we don’t take that as a bad signal.”

That’s just spin from Strope, putting the failure of labor to make its priorities Congress’ priorities. But at least Strope acknowledges the possibility, which is more than other labor leaders do.

Although our ally in the cause Seth Borden is an effective advocate against the Employee Free Choice Act — here’s Kilpatrick-Stockton’s EFCAUpdates blog he co-writes — we disagree with the sentiment in the quote. Many of our NAM members, the smaller companies especially, are just as alarmed as ever at the possibility of action at any time on the Employee Free Choice Act. OK, so Congress won’t pass a law to ruin your business and the economy by March. It may take until June. That doesn’t ease our fears any.

And if there’s a “rethink” by labor, it’s just a political and strategic one. Labor leadership seems as committed as ever to eventually passing the legislation to increase their membership and dues. They’re just figuring out how (and it may come in the form of a new bill all together).

UPDATE (11:45 a.m.): Here’s the New York Times’ take, “Unions Look for New Life in World of Obama“:

Unions are looking to Barack Obama and rising economic anxiety to reverse organized labor’s long slide.

Through three decades of decline, union leaders have been predicting a renaissance that has not come. But labor invested more than $300 million to help elect Mr. Obama and enlarge the Democratic majority in Congress, and it expects both to enact legislation that will make it easier for millions of workers to unionize.

Hoffa: Congress wants the border closed.

As noted immediately below, the House yesterday voted 395-18 to pass H.R. 6630, the bill that renege on U.S. NAFTA commitments by blocking the operation of Mexican trucks in the United States. The floor debate featured no one speaking in opposition, contained a lot of aggressive criticism of the Bush administration and DOT and eventually deteriorated in a partisan dispute over energy policy. In other words, there wasn’t really a debate per se, but rather a series of statements.

Some would dispute our characterization of the bill, acknowledged. From Rep. John Duncan (R-TN), who managed the bill for the Republicans:

Now, let me say once again: this is a very moderate, sensible, balanced, and reasonable bill. It does not prohibit some sort of program for Mexican trucking companies that are safe and don’t have all these violations. It would allow them to come in after additional information is given to the Congress about the results from this 1-year demonstration project. That’s not much to ask for from the administration, and we need that information about safety violations.

We need to find out whether these Mexican truck drivers have drug addictions or they have numerous safety violations, find out whether some of these trucking companies are coming in, these trucks are coming in here in a very unsafe and uninsured condition.

OK. But organized labor, which drove the debate during a campaign year, has never been a big supporter of moderate, sensible, balanced and reasonable. The Teamsters issued a statement applauding the clear effect of the legislation, with President Jim Hoffa declaring: “This bill makes it very clear that Congress wants the border closed. This time, the Bush administration can’t pretend it doesn’t understand what Congress means.”

That is, Hoffa sees this as a victory in a battle in the great trade war. And the Mexicans see a defeat, but they also note they have the ability to exact consequences. From Reuters:

Still, the Mexican Embassy in Washington said it was “deeply concerned” about the House vote and welcomed the administration’s intention to veto the measure.

“Mexico has fulfilled its NAFTA obligations and expects the U.S. do the same. Should the bill be enacted into law, the government of Mexico will consider taking all the appropriate actions, including remedies or countermeasures under the North American Free Trade Agreement,” the embassy statement said.