As reported by Reuters, Mexico placed tariffs on 90 American agricultural and manufactured exports on Monday in response to Washington’s move to block Mexican trucks from using U.S. highways.
Last week, the U.S. Congress canceled funding for a test program that began in the Bush administration that permitted Mexican long-haul trucks to enter and drive in the United States in compliance with the North American Free Trade Agreement (NAFTA).
This dispute is the first for President Barack Obama’s administration with a major trading partner.
Mexican Economy Minister Gerardo Ruiz explained that about $2.4 billion worth of exports from 40 U.S. states would be affected and that his government would soon be publishing a list with the names of the states. Ruiz said, “We consider this action by the United States to be mistaken, protectionist, and clearly in violation of (NAFTA).”
Obama said that his administration would work to create a new cross-border, long-distance trucking program between the two countries.
“The president has tasked the Department of Transportation to work with the U.S. trade representative and the Department of State, along with leaders in Congress and Mexican officials to propose legislation creating a new trucking project that will meet the legitimate concerns of Congress and our NAFTA commitments,” White House spokesman Robert Gibbs said.
Although it is still not clear which exports will be affected, the main U.S. farm products exported to Mexico, rice, corn, beans or wheat, will not be affected, according to the spokesman for the Mexican economy ministry. These U.S. farm products make up much of the average Mexican’s diet.
In 1995, the United States agreed to allow Mexican trucks to start using U.S. highways when it signed the NAFTA pact with Canada and Mexico three years earlier. However, Mexican trucks were limited to border zones where they had to offload goods to be carried by U.S. companies. In 2007, the U.S. government launched a pilot program that allowed a limited number of them full access to U.S. highways, while American trucks were also allowed to operate in Mexico.
The Teamsters Union opposed the trucking provision from the beginning citing concerns over the safety of the Mexican trucks operating in the U.S.
Supporters of the truck program, including former presidential candidate and Arizona senator John McCain, said the Mexican decision was expected, “Unfortunately, this is a predictable reaction by the Mexican government to a policy that now puts the United States in clear violation of NAFTA and was inappropriately inserted into the Omnibus appropriations bill.”
[…] Calderón as both countries struggle in the current economic downturn. As previously reported in La Plaza, Congress challenged NAFTA by canceling funding for a pilot program that would allow Mexican trucks […]