Free Market Carnivore's Blog

Mexican punitive tariffs that have been costing American exporters $2.4 billion annually — including beef and pork exporters —  and imposed other restrictions on exports in retaliation for Obama administration violations of NAFTA trucking agreements could finally end, the presidents of the U.S. and Mexico announced Thursday.

Under phased-in adjustments a part of  the NAFTA agreement, Mexican trucks had been allowed to deliver goods inside the U.S. as long as trucks met certain regulations.  The Obama administration suspended the program when it came into power, triggering protests from Mexico, as well as from U.S. exporters.  The Teamsters had cheered the restrictions, as they favored requiring all goods coming from Mexico to be unloaded and reloaded on American trucks at the border.  Combo bins containing 2,000-lb. bulk batches of ground meat vs. requiring U.S. packers to package ground meat in much smaller individual boxes became an early target of Mexican restrictions aimed at U.S. exporters.

The new agreement — still being negotitated and not finalized according to the administration — could apparently eliminate the punitive tariffs some time this summer, if the proposed agreement is ready for notice and comment by early April.  The agreement specifies that Mexico would lift 50 percent of the tariffs when both nations have signed the final agreement (“US., Mexico Reach Deal to End Trucking Dispute,” Wall Street Journal, 3/3/2011.)

Mexican trucks and drivers will have to comply with a series of safety, driver skills and language tests monitored by the U.S. Dept. of Transportation, the Wall Street story said.  Once the first Mexican carrier receives authorization, the remaining 50 percent of the tariffs would be lifted.  The trucks will also be required to have electronic onboard recorders to track compliance with American hours of service regulations.

After imposing the unneeded bans, costing American businesses and, thus, consumers billions of dollars in tariffs, lost business, lost efficiencies and job impacts, the White House was quoted as calling the potential removal of the ban as a job creator for both nations.  That makes one wonder if Interior Secretary Ken Salazar issues drilling permits after nearly a year of suspensions of deep water drilling in the Gulf, the White House will crow about that ending of the suspension as a “job creator.”  Recall that American businesses, particularly cattlemen, pleaded for two years with the adminstration to sign the already finished trade agreements with South Korea, Colombia and Panama.  Our position was the agreements would boost sales and jobs.  The administration refused, on the grounds that environmental and labor regulations were inadequate in the agreements, no doubt cheering U.S. labor unions.  But when the adminstration trumpeted their having forced changes in the agreement  — which still hasn’t been approved — they crowed about the agreement being a job and growth booster.