Democrats Pick Trade War With Mexico?
Omnibus Would Violate NAFTA; How Will Mexico React?
Barack Obama and the Democrats swept to power on a promise of doing more to restore good relations with key trading partners. To that end we’re selling Eastern Europe out to Russia in a vain attempt to deter Iranian nuclear ambitions, and we’re giving UK Prime Minister copies of Toy Story. And when it comes to treaty compliance, Congressional Democrats are eager to stiff Mexico, and bring the U.S. completely out of compliance with a NAFTA requirement to allow Mexican truckers to operate in the United States:
PRESIDENT OBAMA seems to have resolved, for now, an incipient dispute with Canada over “Buy American” rules in the stimulus package. The law would have hurt Canadian steel exports to the United States, but, at the White House’s insistence, Congress appended language that blunted the worst protectionist consequences. Now, however, Congress has turned on Mexico, the United States’ other partner in the North American Free Trade Agreement. A $410 billion omnibus spending bill contains a provision that would pretty much kill any chance that long-haul freight trucks from Mexico could operate in the United States, as had been promised under NAFTA…
When the U.S. economy needs all the help it can get, this legislation perpetuates inefficiency and invites Mexican retaliation against U.S. exports. To a world looking for signs that Democratic rule in Washington would not mean revived protectionism, this can only be a disappointment.
According to the Post, Mexican truckers are matching domestic truckers in terms of safe driving. Given that, this is a particularly transparent and embarrassing concession to U.S. labor unions, who are pushing to protect their market. Right now, the Mexican government is waiting for the United States to make clear how it wants to renegotiate NAFTA before reacting adversely to this treaty abrogation, but it would not be surprising if the Mexican government takes action down the road to retaliate for this act — assuming that it is enacted into law.
Mexico is a critical international partner – one on whom we depend for much of our trade and an important part of our energy supply. We work with the Mexican government on law enforcement, immigration, drugs, and economic development. The last thing we should want is for Congress and the president to cavalierly punish Mexico as a payback to the unions.