Mexico slaps tariffs on certain U.S. products

by Jay Sjerven
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WASHINGTON – The government of Mexico on March 19 imposed tariffs on about 90 U.S. products in retaliation for the scrapping of a pilot program allowing certain Mexican trucks to haul freight in the United States beyond a 20-mile zone extending from the border. Agricultural products targeted for tariffs included fruits and vegetables, fruit and vegetable juices, soup preparations and concentrates, wine, sunflowerseed and dog and cat food. Food staples such as wheat and wheat flour, corn and corn flour, sorghum and rice were not included given their importance to Mexico’s consumers. Most tariffs will apply to nonagricultural goods.

The truck pilot program was eliminated under a provision inserted in the budget bill signed into law by President Barack Obama. The program’s demise long was sought by unions and some consumer groups that alleged Mexican trucks were maintained below U.S. standards and raised safety concerns.

Under the North American Free Trade Agreement, Mexican trucks were supposed to be allowed to carry freight in U.S. states that share a border with Mexico beginning in 1995 and throughout the U.S. beginning in 2000. The provision was delayed time and again by the U.S. despite a NAFTA arbitration panel finding in favor of Mexico in a challenge to the delays in 2001.

In September 2007, President George Bush implemented the pilot program that allowed as many as 100 Mexican trucking companies to haul cargo into the U.S. after their trucks met safety requirements. The program was renewed in August 2008 and the intent was to expand it. The Mexican government saw the pilot program as a step toward realizing the NAFTA cross-border trucking provision.

"We consider this U.S. action to be wrong, protectionist and a clear violation of the treaty (NAFTA)," said Gerardo Ruiz Mateos, Mexico’s economy secretary. "By deciding to protect their trucking industry, they have decided to affect other countries and the region."

The tariffs will affect about $2.4 billion in U.S. exports to Mexico. The U.S. exported about $152 billion in products to Mexico in 2008. "The retaliatory measures are the cost the U.S. is going to have to pay for failing to fulfill its obligations under NAFTA," Mr. Ruiz Mateos said.

Senator Byron Dorgan of North Dakota, who led Senate efforts to scrap the program, said, "No trade agreement should obligate us to compromise our highway safety."

Other members of Congress expressed concerned the U.S. would turn out to be the loser. Representative Kevin Brady of Texas, ranking Republican on the trade subcommittee of the House Committee on Ways and Means, said, "We’ve got a tough economy. We are going to lose sales, agricultural sales of exports that we are selling into Mexico and that may well go to other countries."

The Obama administration directed the Department of Transportation, the State Department and the Office of the U.S. Trade Representative to work with Congress to develop "legislation that would create a new trucking project that does meet the legitimate concerns of Congress," said Jill Zuckman, spokeswoman for the transportation department.

Robert Gibbs, President Obama’s press secretary, said, "We don’t want to find ourselves in a time of economic slowdown creating or erecting a barrier to that valued trading partnership."

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