Restricting Mexican trucks will hurt U.S. consumers 

A truckload of protectionism

An Orange County Register editorial 

Source URL: http://www.ocregister.com/articles/trucks-mexican-mexico-2339647-haul-long#

 

Despite the clear lessons of history and theory, the political temptation for all too many countries during an economic downturn is to impose various protectionist measures that seem to promise some relief (or special favors) to some sectors of an economy in the short run despite the predictable dire effects over the long run. At least 17 of the 20 advanced-economy countries that solemnly promised at a November meeting to avoid protectionism have already done so. Sadly, the United States is one of the offenders.

Ever since NAFTA – the North American Free Trade Agreement – was passed in 1994, the U.S., spurred on by the Teamsters union, has tussled with Mexico over the issue of whether long-haul trucks from one country would be able to operate in other NAFTA countries. Not only was an agreement to do so incorporated in the NAFTA agreement, the savings from such an arrangement are obvious. If Mexican trucks are restricted from operating in the U.S., for example, long-haul Mexican trucks have to stop at the border, transfer their loads to short-haul trucks to cross the border, stop again, and transfer loads to U.S. long-haul trucks. Time and gas are wasted, and pollution is increased.

Advocates of restricting Mexican trucks have expressed concerns about safety and the roadworthiness of Mexican trucks, but a recent pilot program has shown such arguments to be a smoke screen. Since September 2007, a demonstration program has allowed 26 carriers from Mexico, with 103 trucks, to operate in the U.S. (and U.S. trucks to head for final destinations in Mexico). Over 18 months 45,000 border crossings have occurred without incident, Reports from the U.S. Department of Transportation and an independent evaluation panel show that Mexican trucks have been at least as safe as U.S. trucks.

Nonetheless, a provision tucked into the recent $410 billion appropriations bill ended the program, a sweet little favor to labor unions. In response, Mexico, which has been inordinately patient until now, has slapped tariffs on 90 different U.S. goods that account for about $2.4 billion in trade. Mexico, the second-largest buyer of U.S. exports, has shown some concern for its consumers by still allowing U.S. long-haul trucks to operate in Mexico.

It is too bad the Congress showed no similar concern for U.S. consumers, who will ultimately pay for the higher costs of shipping when Mexican trucks are restricted. It is also sad that Congress sets such a bad example for the rest of the world by adopting a price-raising protectionist measure in the midst of a recession.

The best way to avoid having such childish tit-for-tat protectionism escalate into an all-out trade war when international trade is already declining precipitously is for Congress to rescind this foolish move.

 

 

 

Association of Importers & Exporters of Texas

 

( Founded in 1994 as IMPORT-EXPORT PRODUCE ASSOCIATION )

 

 

 

Federated to: 

Mexico Imposes Higher Tariffs on U.S. Products

Due to N.A.F.T.A. Agreement Cancellation 

By Abby Eden

Weekend Evening Anchor

MEXICO - Today Mexico raised tariffs on eighty-nine products from the United States.

That's because President Obama cancelled a N.A.F.T.A. agreement allowing some Mexican trucks to go further into our country.

The tariffs will affect several kinds of produce that are brought into Mexico like onions and potatoes, but tariffs will also go up on Christmas trees, toilet paper, and wine, for example.

Texas is the number one exporting state in the U.S., and its highest importer is Mexico.

Last year, Mexico imported more than sixty-two billion dollars worth of products from Texas alone.

Of the nearly ninety products affected by these higher tariffs, many of them are not top Texas exports which include chemicals, computer equipment, and machinery.

However, it may affect other "top ten exports" like produce, metal, and agricultural products.

Emilio Santos is a wine exporter. He says these tariffs will have a dramatic effect on his business.

"They will affect the exportation of this wine. We're still exporting wine from Chile or wine from Europe, but the American wine will be affected," Mr. Santos explains.

This is not the first problem with N.A.F.T.A. agreements between the United States and Mexico.

In January 2008, Mexican farmers were outraged by one agreement that gave U.S. farmers subsidies for selling produce in Mexico, allowing them to sell their products for far less than Mexican farmers.

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