Mexican Tariffs Prompt Loud Calls by Business for Trade Talks

Posted April 9, 2009 at 12:35pm

Seeking to avoid further economic disruptions, a coalition of businesses, manufacturers, food and agricultural groups has joined forces to urge President Barack Obama to end a multibillion dollar dispute over Mexican truckers entering the United States.

In a letter sent Wednesday to the White House, more than 150 industry giants, including General Electric, Wal-Mart, the Business Roundtable and the National Corn Growers Association, called on the administration to “work expeditiously to resolve this dispute and ensure the United States is upholding its bilateral trade obligations with Mexico.—

The coalition, run out of the National Pork Producers Council, held an initial organizational meeting yesterday, and its members have already lined up a meeting with House Republican leadership aides for today.

“The room was packed with lobbyists,— said a coalition member who attended the meeting. “There was tremendous concern and agreement we need to move on Capitol Hill.—

The letter comes two months after Congress approved language inserted by Sen. Byron Dorgan (D-N.D.) into the federal stimulus bill that shut down a pilot program that had allowed some Mexican truckers to travel beyond a 25-mile commercial zone inside the United States.

In response, the Mexican government slapped retaliatory tariffs on $2.4 billion worth of U.S. exports, concentrating on products that come from the home regions of key opponents of the trucking initiative.

Among the dozens of products are Christmas trees, dried and fresh dates, and peanuts, all of which face a 20 percent tariff. Pencils, coffeemakers and toilet paper, among other items, will also cost 10 to 20 percent more for Mexicans to buy.

The coalition claims the tariffs put more than 26,000 U.S. manufacturing and agricultural jobs at risk.

“We have a commitment under NAFTA,— said Chuck Dittrich, vice president for regional trade initiatives at the National Foreign Trade Council, a signatory on the letter, referring to the 1994 pact that opened trade between the United States, Canada and Mexico. “The United States should adhere to the rules just as our trading partners do. It’s U.S. workers and consumers that will ultimately benefit by following the rules,— said Dittrich.

Supporters of opening the border hope the Mexican government’s strategic placement of tariffs, combined with Members’ concerns about the impact of the economy back home, will sway the minds of a Congress that has for years vehemently opposed any attempts to open the U.S. to Mexican trucks amidst safety, economic and environmental concerns.

“Now this is hitting home for some Members,— said Janet Kavinoky, director of transportation infrastructure at the U.S. Chamber of Commerce, and one of the leaders of the coalition. “It’s an opportunity to get them to pay attention to the facts and not just listen to the histrionics.—

The coalition’s outreach to the White House demonstrates the pressure the administration is under to seek a compromise before Obama travels to Mexico City next week to meet with President Felipe Calderón, and comes as the two countries engage in renewed talks to stem violence at their borders.

“Congress doesn’t have to worry about foreign policy,— said a senior Democratic aide. “The administration has to keep at least one eye on diplomatic relations.—

Secretary of Transportation Ray LaHood held an off-the-record meeting with key outside stakeholders last week, and has spent a significant amount of time in recent weeks on Capitol Hill, meeting with key Members of Congress, including Rep. James Oberstar (D-Minn.), chair of the House Transportation Committee, and Dorgan, the author of the spending bill provision that ended the program.

“The ball is in the administration’s court,— said a spokesman for the House Transportation and Infrastructure Committee. “Any changes are going to be a tough sell for a lot of Members of the House and the Senate.—

President George W. Bush created the border truck pilot program in 2007 despite strong, bipartisan opposition from Congress. A provision to stop federal funding for the program was included in the 2008 appropriations bill, but a loophole in the provision’s language allowed the Bush administration to continue the program, until now.

“The question is,— said Kavinoky. “Will $2.4 billion of Mexican tariffs on U.S. products be sufficient motivation for Congress to honor our NAFTA commitment?—

Outside of Congress, opposition to the program has been led by groups such as the International Brotherhood of Teamsters, Public Citizen, and Advocates for Highway and Auto Safety, who argue Mexico has failed to live up to the safety and environmental standards established by NAFTA and, more recently, are concerned about the safety of U.S. drivers encountering border violence.

“We’ll have to see what the administration puts forward,— said Lisa Kinard, director of federal legislation and regulation for the Teamsters, referring to the potential for accepting a new policy proposal. “Our focus is on safety.—