Obama caving to Mexico on trucking dispute

[FightingIrish-42]

Despite the safety and security implications, looks like Obama is essentially going to say, "Yes Mexico, whatever you say. You're right, we're wrong. We deserve to be punished." Is he ever going to stand up to Mexico and fight back on this or any other issue?

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Inside U.S. Trade - 7/31/2009

Kirk Highlights Truck Solution Over Challenge Of Mexican Sanctions

U.S. Trade Representative Ron Kirk has signaled that it his clear preference to address the punitive tariffs that Mexico has imposed on U.S. exports in a bilateral trucking dispute by opening the U.S. market to Mexican trucks instead of challenging the tariffs as disproportionate to the economic damage caused by the U.S. decision to close its market to Mexican trucks.

In a July 1 letter to House Foreign Affairs subcommittee Chairman Brad Sherman (D-CA), Kirk pointed out that challenging the Mexican duties would not succeed in lifting them.

"[E]ven if the United States were successful in challenging the level of retaliation, the likely result would only be a reduction, not a removal, of Mexico's trade sanctions," Kirk wrote, according to a copy of the letter reprinted below. "And our goal is to have the sanctions lifted in their entirety."

At the same time, Kirk insisted that he has not ruled out anything, and that the administration is still examining whether Mexico's retaliation is greater than permitted. He also emphasized that he is working with Secretary of Transportation Ray LaHood to resolve the dispute.

"Although we will continue to consider all of our options, I believe that working with Mexico and Congress to implement a new trucking program that ensures the continued safety of our roads will provide the quickest and surest way to end Mexico's trade retaliation against U.S. exports," Kirk wrote.

But informed sources said this week that the trucking dispute has remained essentially stalled since DOT supplied a series of principles to resolve the trucking dispute to the White House.

This apparent lack of progress makes it doubtful that the bilateral trade dispute will be substantively raised on the margins of the Aug. 9 to Aug. 10 North American Leaders' Summit between President Barack Obama, Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper, private-sector sources said.

When Mexican Secretary of Economy Gerardo Ruiz Mateos last week met with Kirk and Canadian Trade Minister Stockwell Day on the sidelines of the Asia Pacific Economic Cooperation (APEC) forum in Singapore, Kirk gave no indication that the White House had made any progress on resolving the issue since last June, according to a Mexican official.

In early June, Ruiz Mateos said that he had an agreement with Kirk to have "a different approach" for solving the trucking dispute and a timeline for doing so by the leaders' summit (Inside U.S. Trade, June 5).

Resolving the trucking dispute pits the domestic interests of some U.S. trucking companies and the Teamsters Union against the U.S. relationship with Mexico, and Obama will have to decide if he wants to spend the political capital to reach a resolution, according to Robert Pastor, the co-director of the Center for North American Studies (see related story).

In a related development, a coalition of trade associations and agriculture groups affected by the Mexican sanctions is seeking a meeting with USTR to ascertain the status of efforts to resolve the trucking dispute. Coalition members also want to urge the officials to work toward a quick resolution, according to private-sector sources.

According to the Kirk letter, the USTR assessment of Mexican tariffs involves a review of available economic information, including a report by Public Citizen, which charges that Mexican sanctions exceed the impact of barring Mexican trucks from the U.S. market, according to the letter.

Informed sources said that USTR would very likely seek an economic analysis from the U.S. International Trade Commission to determine if the sanctions do exceed the damage caused by the U.S. failure to implement its NAFTA trucking obligations. At press time, USTR had not done so, though some officials maintain that USTR has economists that could conduct the relevant analysis.

In its mid-March retaliation, Mexico snapped back tariffs to most favored nation levels on $2.3 billion in U.S. trade, generating roughly $427 million in revenue. At the time, a Mexican official said this was close to the amount of income Mexican truckers were losing, which he defined as roughly $500 million (Inside U.S. Trade, March 17).

This week, a Mexican official said that the methodology included variables such as the value of trade transported by Mexican trucks, travel distance for exports and the percentage of market share that Mexican truck would account for in the U.S.

Mexico imposed the tariffs after the U.S. Congress voted to cut funds for a trucking pilot programs that allowed up to 100 trucks to deliver to and pick up cargo in the U.S. The provision was part of the omnibus appropriations bill for fiscal year 2009, which Obama signed.

In a June 16 letter, Sherman pressed Kirk on the U.S. to challenge the Mexican retaliation as "manifestly excessive" compared to the impact of the U.S. failure to open its market to Mexican trucks as obligated under the NAFTA.

Sherman's letter cited an analysis by Public Citizen, which estimated Mexico's highest possible annual losses as ranging from $69 to $227.6 million (Inside U.S. Trade, March 30). "That is to say that Mexico's real losses are 16 to 53 percent of what is being imposed," Sherman said.

He asks Kirk to spell out what activities he is undertaking to initiate a NAFTA challenge and to explain his reasoning if he has decided against that. Sherman also insisted that Mexico still has truck safety issues, emission standards, insurance and data-keeping requirements that it needs to address, and explained that that is why he voted for cutting the funds for the pilot program.

However, Kirk's July 1 response did not address these questions in detail, and he also expressed the hope that Sherman would support the administration's efforts to put in place a new trucking program.

Sherman is not satisfied with this response, particularly since it seems to put the onus of resolving the dispute on Congress and intends to go back to USTR for more detailed answers, according to an informed source.

In last week's meeting, Kirk and Ruiz Mateos did not address the long-standing bilateral fight over whether Mexican tuna can be labeled as "dolphin-safe" based on the method by which it has been harvested. The two sides explored a potential settlement in early June and have subsequently held discussions, even though USTR has held out little hope that the dispute can be resolved since Congress would need to act to change the labeling requirements.

Mexico is also aware that it will be difficult to resolve the dispute, for which it requested a World Trade Organization dispute settlement panel on April 20.

In response, the U.S. has insisted that the dispute should be arbitrated by a NAFTA panel (Inside U.S. Trade, April 24). The panelists for the WTO panel have not been selected and Mexico may ask WTO Director-General Pascal Lamy to select them if there is no agreement with the U.S. on them, according to a Mexican source. -- Brian Scheid

[vmonkey56]

Truckloads of drugs, nukes, illegals immigrants, fake products and stupid truckers with trucks lacking safety precautions. Americans stand together! And educate others daily.

We are under attack from Mexico in every way.

[working4change]

Mexico Gets Serious in the U.S. Crossborder Trucking Fight. So Should Obama.

* Analysis by: John Schulz
* Analysis of: Mexican Truckers File $6 Billion Claim Against U.S. in NAFTA Spat
* Published at: online.wsj.com

Summary

Mexico is ramping up the pressure on the United States to get the Americans to live up to terms of the NAFTA fine print that allows Mexican truckers to operate in this country. The latest squeeze is a $6 billion lawsuit against the U.S. government because of its refusal to allow Mexican-domiciled trucks into this country beyond the current 25-mile free trade zone at the southern border. Will the Obama administration cave?
Analysis

How deeply is the Obama administration wedded to the desires of the 1.4 million-member Teamsters, the first large union to support the then relatively underdog Democratic candidate who was running a distant second to Sen. Hillary Clinton for the president nomination nearly two years ago?
We're about to find out.
The Teamsters don't want Mexican truckers to operate in this country. The union says the issue is safety, but it's really not. The union says it's about jobs, but it's really not.
What it's about--surprise, surprise--is money.
If Mexican truckers are allowed to operate on any sort of large scale in this country, two things are bound to happen:
1. Trucking rates will fall as U.S. trucking companies will have to compete with the Mexicans on price.
2. Truck driver wages will fall as some Mexican carriers, accustomed to working for as little as $10 to $20 a day, will apply at non-union U.S. trucking companies, further driving down wages.
That's fine. But the bigger issue is the word of the United States government.
The U.S. signed the North American Free Trade Agreement in 1994 under then-President Bill Clinton. NAFTA was supposed to allow for a "borderless" society in which free trade was promoted among Canada, Mexico and the U.S.
Part of that called for allowing Mexico- and Canada-domiciled truckers to operate in this country. Up north, that has happened. The U.S.-Canada border is basically open to trucks of both companies.
Along the southern border, that has not occurred.
There were supposed to be years of hard work to assure that sufficient safeguards were in place to root out unsafe Mexican truckers. The Clinton administration, bowing to pressure from the Teamsters, kept the border closed and basically punted to the Bush II administration.
President George W. Bush, distracted by two wars and his plummeting approval ratings, dragged his feet until the seventh year of his administration when he basically performed a few studies and declared the border open.
Lawsuits inevitably followed by the Teamsters and safety advocates. Talk radio seized the issue, and the House of Representatives overwhelmingly voted to kill the Bush pilot program really before it ever got a chance to get started.
Now, the Mexicans are crying foul, saying the U.S. is discriminating again Mexican truckers and have slapped 20 percent tariffs on as many as 90 U.S. industries' products to get the border open.
U.S. industries such as grocery and some agricultural groups are now pressuring the Obama administration to open the border to get these tariffs removed.
"During this time of historical job loss, w should be doing everything we can as a country to ensure commerce and trade flow as freely as possible," a spokesman for the Grocery Manufacturers Association tells the Wall Street Journal.
He has a point. The bigger issue is what is the word of the United States worth when it comes to living up to our international treaty obligations?
Mexico is further racheting up the pressure by suing the U.S. A trade association representing 4,500 Mexican trucking companies is suing the U.S. for $6 billion in a fair trade restraint argument against the U.S.
The Obama administration seems to be listening. A State Department official says the claim is "being studied" by Secretary of State Clinton's office. Similiarly, the U.S. Trade Representative's spokesman said Ron Kirk takes this issue "very seriously" and the USTR's office has been studying the issue for "a couple of months."
So has Transportation Secretary Ray LaHood. The former Republican Illinois congressman has been personally lobbying the House to try to work out an agreement that satisfies safety groups and politicians while allowing the U.S. to save face internationally.
In a speech in Washington on May 21 before the National Press Club, LaHood signaled that an end to the Mexican truck impasse could be coming soon, perhaps this summer. He says there is a proposal circulating on Capitol Hill that would assure the safety of Mexican trucks with increased testing and oversight of those trucks and their drivers.
Fact is, we are not talking about a lot of commerce here. While some Mexican truck fleets have indicated an interest in operating in this country, the vast majority have not. Conversely, U.S. fleets currently have a workable system with major carriers such as CFI (a unit of Con-way Truckload) and Indianapolis-based Celadon using a network of Mexican-based partners to haul south of the border.
It is unclear how much of an economic impact Mexican fleets would have in this country. After all, they would be forced to compete with the likes of UPS, FedEx, Con-way, ABF Freight System, J.B. Hunt, Schneider, Swift Transportation and other top-flight operators armed with some the latest technology in the industry. These carriers would not give up market share to its good customers willingly.
Enter Obama and the Teamsters. Could a deal be cut? Sure it could.
Obama has to throw the Teamsters a political bone after the Big Labor's No. 1 priority, the Employee Free Choice Act, failed this year. If he caves on Mexican truckers, that would be strike two against the Teamsters.
What could Obama give the Teamsters in return? Perhaps the bone is that $1 billion request that troubled LTL carrier YRC Worldwide has made to tap into those Troubled Asset Relief Program (TARP) funds to help pay for the Teamsters' multi-employer pension contributions, which YRC has basically stopped making to at least the Central States plan, the union's largest.
It's a complicated picture with many moving parts, international and otherwise. But as Deep Throat told the Washington Post's Bob Woodward a generation ago when he was tracking down the full story of Watergate: "Follow the money.

http://www.glgroup.com/News/Mexico-Gets ... 39994.html

[NoBueno]

"Although we will continue to consider all of our options, I believe that working with Mexico and Congress to implement a new trucking program that ensures the continued safety of our roads will provide the quickest and surest way to end Mexico's trade retaliation against U.S. exports," Kirk wrote.

Mexico's trade retaliation against U.S. exports! I find this so amusing that I'm beside myself. Mexcio has 12-20 million of their citizens living illegally in the U.S. and we are allowing mexico to dictate anything regarding trade between the two countries?

Once again the U.S. gets SCREWED because we want to play by the rules while our adversary (no, that's not a typo) to the south, will use any means to exploit this so called free trade relationship to their advantage!

This despite the fact their is overwhelming evidence that not only are these trucks and drivers unsafe, but they they are also abusing this agreement to transport illegals and drugs across that border!

While the terms of NAFTA may allow Mexican truckers to operate in this country( assuming it does), i'm almost certain it does not allow them permission to transport illegals and or drugs into this country under the guise of free trade. Therefore, it would seem as if we have every right to unilaterally rescend that portion of the agreement because of mexico's continued violation/breach of that condition.

[vmonkey56]

Americans pay and pay!

[April]

OUr government has sold us out in every way, they are able to do this because of the okay from Obama and his puppet masters.

[SOSADFORUS]

Congress stopped the program and only congress can fund and start it up again...

Mexico never fully fullfilled their part of the nafta agreement for truck safety and standards.... cross border security is not secure enough to trust what is in the back of their trucks..

They can not read English in many cases and it is part of the agreeement, plain common sense says if you are going to drive in the U.S. you need to read English...

I say dump NAFTA, it is the reason they refuse to secure our borders!!

Besides I don't believe NAFTA was ever approved by congress! Was it?? wasen't it signed by Clinton and only and agreement?

[vmonkey56]

Related Post:
I.C.E. News Releases July 2009
http://www.alipac.us/ftopict-165282.html

7/30/2009 Nogales, AZ Tractor trailer stopped carrying 97 smuggled aliens, including children Media Gallery

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