It Looks Like Mexico Will Retaliate When Barack Obama Violates NAFTA
I’ve written before about a dangerous provision of the Omnibus appropriations legislation now under consideration in the Senate. The bill violates the U.S. commitment under NAFTA to allow Mexican trucking companies to operate in the U.S., so long as they meet all the standards to which U.S. companies and trucks are held. If Obama signs this measure into law, Mexico will have the right to retaliate against the U.S. - presumably by restricting exports from the U.S. to Mexico.
Barack Obama opposed the Mexico truck pilot program when he was in the Senate, but you might expect him to rethink his view now that he sits in the Oval Office. After all, he campaigned on a promise to restore good relations with our neighbors, and on a promise to restore economic growth. Picking a fight with Mexico now would be a very public renunciation of both those promises.
The Mexican government has not yet shown its cards; the Mexican Ambassador has merely stated that Mexico ‘will keep all its options open.’ One (subscription only) trade journal reports however, that Mexico will exercise its right to retaliate:
Mexico is threatening tough trade retaliation if Congress and the Obama administration move ahead with proposals that would ban Mexican truckers from travelling throughout the United States, as spelled out in the North American Free Trade Agreement (Nafta).
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