RSS Feed MenuRemember all the fuss during the debate over the stimulus bill about the “Buy American” provision? And how the President said that, “I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade.” And that he said that, “we need to make sure that any provisions that are in there are not going to trigger a trade war,” in his interview with Charlie Gibson? And that Congress rewrote the bill so that the provision would be “consistent with international obligations”?
Well guess what: President Obama just signed a bill that not only threatens to, but actually violates, an international trade obligation, in this case, the North American Free Trade Agreement (NAFTA). And you probably didn’t even hear about it.
A provision in the $410 billion stopgap funding bill that the President signed on Tuesday prevents implementation of a provision in NAFTA that permits properly licensed Mexican trucking companies from operating throughout the United States. Specifically, the bill prevents the U.S. Department of Transportation from continuing a pilot program to begin U.S. compliance with its NAFTA obligation.
In NAFTA, the United States agreed to a gradual opening of all U.S. roads to Mexican trucks, ending a Congressional moratorium enacted in 1982. First, all border states were to be open to Mexican trucks by 1995, and then the full U.S. market upon certification of Mexican trucking companies by the U.S. Department of Transportation. But the process was supposed to be complete by January 2000.
After the Clinton Administration declined to act, a NAFTA panel unsurprisingly decided in 2001 that the U.S. was in breach of its obligations. In 2002, the Bush Administration took a major step to implementing the provision, which led to the pilot program. But Senator Byron Dorgan (D-ND), among others, has been an opponent of complying with the provision. In 2007, he and Senator Arlen Specter (R-PA), who should know better, sponsored an amendment to prevent the U.S. Department of Transportation from using funds to implement a pilot program to implement the provision nationwide. The vote was unfortunately overwhelming.
Opponents claim that Mexican trucks may not meet U.S. safety requirements. But the companies would have to be certified by the U.S., so this is a bit of a false rabbit. Anyway, the pilot program included only 103 Mexican trucks operated by 26 carriers, while the U.S. was permitted 10 carriers with a total of 61 trucks operating in Mexico. Without the pilot program, Mexican trucks are limited to a small commercial zone near the border, which severely restricts trade – or forces commerce onto U.S. trucks, depending on one’s perspective. It’s a pretty small pilot given the volume of commerce between the U.S. and Mexico but apparently too much of a threat for some NAFTA opponents.
This issue has been a persistent irritant in an important bilateral relationship. (It was already a hot issue when I was a research analyst on transportation issues 12 years ago.) It would have been nice if the President had included a specific mention of the NAFTA obligation in his signing statement on the bill. Fortunately, the Administration now claims that it will try to revive the pilot program.
Quickly, please. We do $1 billion a day in trade with Mexico. A good bit of that trade must and should be carried in trucks. A stronger Mexican economy is good for the United States and for our national security. Apparently Mexico has already prepared a list of possible sanctions against the United States in case the U.S. does not respond in a timely manner.
A trade war with Mexico is the absolute last thing either country needs right now. Keep NAFTA going, and keep on trucking.
midcon // Mar 13, 2009 at 11:19 am
Come on John! Mexico is a failed state with open warfare between the cartels and the Mexican army. The Mexican police are either corrupt or in fear of their lives. There is open talk of sending the National Guard to protect the border. The cartels are recruiting American teenagers as assins. As far as I am concerned (as a moderate), we have two choices, invade Mexico and gain a few more states (and end illegal immigration to boot) or seal the border so that nothing gets through. Regardless of NAFTA or the logic of allowing Mexican trucks free access, don’ t you think things are just a little bit hairy down there right now?
ottovbvs // Mar 13, 2009 at 12:09 pm
Personally I favor allowing Mexican trucks on US roads but I would imagine at this moment this would be fairly popular and therefore redound to Obama’s credit. Secondly, to suggest that this constitutes starting a trade war with Mexico is a piece of absurd over exaggeration that falls distinctly into the Peter and the Wolf category and is therefore damaging to conservative credibility. There used to be a time when it was democrats that started shouting the sky was falling at every little thing but we seem to have umed this mantle.
John // Mar 13, 2009 at 8:07 pm
Thanks for the comments.
Midcon,
Yes, they are — but the key fact is that the Mexican trucking companies would be certified by the U.S., so they would have to comply with our safety standards. Sealing the border would disrupt commerce in the U.S. as well as Mexico
Otto,
It’s been over eight years since the NAFTA panel ruled against us. Mexico would be perfectly within its rights to draw up a list of American products against which to retaliate (they announced this publicly last week). At that point, would we then retaliate? That’s why I used “trade war.” But maybe “skirmish” would have been better.
Bulldoglover100 // Mar 13, 2009 at 9:18 pm
Sorry but this argument just does not fly for me. The agreement with Mexico once again leaves American on the short end of the stick. They are allowed twice as many trucks here as we are allowed there and their trucks, which everyone KNOWS will not be up to standard, will require money for our agents to check and stay on top of or our country is left wide open to problems.
While NAFTA plays an important role in our economy, it has never been fair to this country. For the rich? It was great but in reality? OUR economy has suffered though small business failing and jobs going over seas.
Obama is only doing what he said he would when he ran for President. This is part of the reason so many Independents voted for him
NathanG // Mar 14, 2009 at 4:36 am
As this petition below states, most conservatives used to oppose free trade, but only in recent years have supported it:
http://www.conservativeexodusproject.com/
..
sinz54 // Mar 14, 2009 at 6:43 am
I have always been a free-trade conservative. We should be OPENING our borders with Mexico and Canada, to the extent possible consistent with fighting the War on Terror. There’s nothing wrong with allowing Mexican trucks on America’s roads, provided they have been inspected and found to meet American standards. Yes, a few will violate those standards, and I’m sure those will end up as rror stories on Michelle Malkin’s website. But a search of the archives on Google News will find plenty of stories of American truckers w made disastrous mistakes, resulting in bad accidents. Will we come down as American truckers who cause accidents on Mexico’s highways?
sinz54 // Mar 14, 2009 at 6:44 am
As part of being a free-trade conservative, I believe that Bush and McCain had the immigration issue right the first time: Let’s give illegal aliens a path to citizenship, provided they learn English and swear allegiance to our Constitution.
midcon // Mar 14, 2009 at 6:45 am
John, I am not a trade expert, but I am familiar with what we import from Mexico. What I don’t know is what we actually export to Mexico? Is the economic well being of the Mexican popoulation such that they can afford to buy what we make? As far as I can tell, our largest export is expatriates, spring break students, and vacationers. We also export guns to support their war, but what else? I’m in favor or free trade – “trade” being the operative word. Trade to me means there is a “buy” on both sides, which is relative balance. Not just a we buy they sell. But I digress – back to the war. Talk to me about trucks when the war in Mexico is over. Until then, no trucks.
midcon // Mar 14, 2009 at 7:56 am
John, as an example of what I am saying, read David Frum’s article in the National Post. There is a war going on while we talk about truck safety. http://www.nationalpost.com/opinion/story.html?id=1388000. We have a drug problem in this country that is a direct cause of this war. It’s not a conservative or liberal issue it’s a societal issue. Putting drug users in jail is not the answer and legalizing drugs is just another nail in the coffin. People use drugs for a reason and we have to tackle the causes not the symptoms. Until we do that, the war (with like real guns and real armies) will continue to escalate. As I said when the talk gets around to calling out the National Guard, people had better start taking notice.
larryo // Mar 14, 2009 at 8:36 am
Your concern for the send-our-jobs-overseas treaty brings tears to my eyes. As I recall, the conservatives’ President arrogated unto himself, and himself alone, the authority to abrogate any treaty he found inconvenient, up to and including the Geneva Conventions. Post what you wrote protesting that move at the time, and what you have written here will be worthy of consideration.
sinz54 // Mar 14, 2009 at 11:58 am
larryo: AFAIK, the only clause of the Geneva Convention that the Bush Administration clearly violated, was the clause obligating the Occupying Power (that’s us) to maintain order in the Occupied Territories (that’s Iraq). Allowing the looting and breakdown of civil order was the first and biggest mistake Rumsfeld made after the fall of the Saddam regime. If you’re thinking about something else, remember this: Civilian terrorists (like al-Qaeda) have NEVER been entitled to the protections of the Articles of the Geneva Convention that the U.S. had signed. In past wars going back to the Franco-Prussian War, civilian partisans, when caught by the enemy, were often shot in cold blood. In the 1970s, there was an attempt to cover civilian combatants in Protocol I–but that was never ratified by the U.S. Congress, on precisely the grounds that as written, it could be interpreted as protecting terrorists: http://en.wikipedia.org/wiki/Protocol_I And so it doesn’t apply to us.
There’s a reason for that: Preserving the difference between innocent civilians and soldiers is key to the modern laws of civilized warfare. Civilian partisans (including terrorists) attempt to blur that by dressing like civilians while fighting like combatants, and so have earned the enmity of all governments. That’s why, ever since the Franco-Prussian War, civilian partisans, when caught by the enemy, were invariably SHOT in cold blood. No trial, no POW camp, nothing. The U.S. would have been within its rights to shoot any al-Qaeda captured on foreign soil at its discretion. That we did not do so, and instead interned them, is a tribute to our self-restraint. We exercised a lot less self-restraint after Pearl Harbor.
sinz54 // Mar 14, 2009 at 12:04 pm
larryo: What do you have against the unfettered movement of capital around the globe? You move capital around the globe every time you buy something from a foreigner on EBay. You do so every time you invest in a mutual fund that has stocks in so-called “emerging markets.” I thought you left-wingers were always so concerned about poverty in the Third World. You should be pleased about all the high-tech companies training folks in India to do white-collar jobs instead of slaving away on hand looms. You should be pleased about Botswana having the highest GDP growth rate in all of Africa, thanks to foreign investment and pro-capitalist policies. You lefties used to bleat about w the West is exploiting the developing world. Well, today, thanks to outsourcing, OPEC, emerging markets, and the Pacific Rim, the developing world is now exploiting us. Why aren’t you pleased?
larryo // Mar 14, 2009 at 3:24 pm
sinz – your view of my posts is just as myopic as your view of the Geneva accords, which you will recall Al Gonzales describing as “quaint” and GW Bush dismissing as not binding – the question of whether they protect civilian combatants is a red herring. Second, I take issue with any treaty that benefits a small and elite sector of America – the multinational corporations – at extreme cost to the rest of us. You forgot the part about moving capital around “in search of cheap labor,” I noticed. Finally, your concern about poverty in the third world is touching – nothing has done more recently to increase poverty in Mexico and uproot the traditional farmers than NAFTA. That’s why we have thousands of them streaming over the borders every day, much to the chagrin of the conservatives who promoted and supported these treaties. This is not only the law of unintended consequences in action – opponents of “free trade” predicted it would happen. This is about you and your ilk complaining about the perfectly foreseeable consequences of policies you favor and trying to blame those consequences on someone else – anyone else. Sorry – it’s too late.
midcon // Mar 15, 2009 at 5:37 am
larryo: You said that “nothing has done more recently to increase poverty in Mexico….. than NAFTA.” Are there studies with data that you are referencing? If so, would you provide the references please? I’m not sure I get the connection between the free import of goods from Mexico (tomatoes, grapes, transmissions); the export of goods from the U.S. (dollars) and how that causes Mexicans to abandon their farms and cross the border. From what I can tell, NAFTA is a super highway that only runs South to North. With goods being produced in Mexico and not in the U.S. what’s the connection between increased poverty in Mexico and NAFTA?
sinz54 // Mar 15, 2009 at 7:03 am
midcon: Before this recession hit, the U.S. exported some $150 billion per year of goods and services to Mexico, and imported some $200 billion per year from Mexico. Your implication that the U.S. exports nothing to Mexico except dollars is just false. Companies in Mexico use the same U.S. built computers and software that you and I do.
sinz54 // Mar 15, 2009 at 7:12 am
larryo: The decline in small farms in Mexico had little to do with NAFTA. It’s a trend that had been going on long before. Mostly due to the fact that small farms in Mexico can’t compete with U.S. agribusiness, which as you know is generously subsidized by the U.S. government. If Obama ends subsidies to agribusiness, that imbalance should ease. Then you can stop bleating about small farms in Mexico, and start bleating about the death of farming in the U.S. As for Mexican immigration to the U.S.: The *LEGAL* immigration sparked by NAFTA is mostly Mexican white-collar professionals, and it’s less than 100,000. As you know, ILLEGAL immigration was a problem way back even in the 1980s, so you can’t blame that one on NAFTA. The 12 million illegal aliens come here to find work in agribusiness. (It’s interesting how you lefties have suddenly discovered that this is a problem, after having worked so hard to turn America’s cities into “sanctuary cities” where these illegal aliens can live and work.) The right answer is NEVER to tell decent, honest, hard-working people who want to come to America that they can’t. America needs a growing population to compete with the fast-breeding Muslims in the Third World. (And America should aggressively promote abortion and birth control in the Third World, so those Muslims breed less rapidly.) The right answer is to provide a path to citizenship that makes sure that we’re getting people who truly want to be part of the American dream, not people who just want a paycheck to send back to their families in Mexico.
midcon // Mar 15, 2009 at 8:07 am
sinz54: The average exports from Mexico over the last 5 years was $190B. The 5 year average for imports was $130B. The data also shows a continual increase in the imbalance between imports and exports. Additionally, the data does not account for illegal imports (illegal drugs). Nor does it account for the export of dollars due to tourism and increasing service tourism. Still, I did not intend to imply that we don’t export anything, but as you are well aware the imbalance with Mexico and probably most other countries (espeically China) are not in our favor. Yet, all this shifts attention away from my fundamental point, which I continue to assert, and that that there is a war going on in Mexico and that war has crossed over the border. When the war is over I’d be happy to talk about trucks. Talking about NAFTA while this is going on is tantamount to Nero fiddling while Rome burns.
sinz54 // Mar 15, 2009 at 9:41 am
If you’re referring to the drug war in Mexico, you can’t fix it in Mexico. Those Mexican crime syndicates are supplying the apparently insatiable appetite in the U.S. for illicit drugs, especially heroin and cocaine. The U.S. is the biggest user in the Western Hemisphere. If anything, Mexicans should be blaming *us*; it’s our use of illicit drugs that is helping to destabilize Mexico (and fund the Taliban in Afghanistan, and lots of other international problems). And so the solution has to start right here in the U.S., with a drastic overhaul of our drug laws. The traditional approach, of treating drug addiction as a crime, goes back to the Harrison Narcotics Act of 1914. That’s what started us down this long stupid road. And with its 100th anniversary coming up in just 5 years, we ought to look at how we can do things differently.