Yes, yes, I know: NAFTA’s supposed to prevent that sort of thing, but we’re having one anyway:

Ricardo Alday, spokesman for the Mexican Embassy in Washington said pressuring politicians by hitting imports from states with key Democratic leaders with tariffs of up to 90 percent “is one the main considerations,” for the action, the Dallas Morning News reported Wednesday.

The official list of products has not been released, but a draft obtained by economist Dermot Hayes at the University of Iowa suggest the tariffs will pinpoint almonds from California, sunglasses from Illinois, bowling equipment from Nevada and books from New York — the home states of House Speaker Nancy Pelosi, President Barack Obama, Senator Majority Leader Harry Reid and U.S. Secretary of State Hillary Clinton.

And before you ask: yes, it’s because of the bill that Dina Titus (D-NV) said that she read.

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President Bush’s critics often accused him of alienating key U.S. allies. Frequently that case was overstated, as the Bush Administration forged stronger bilateral ties with many strategically important allies, and as the Administration’s foreign critics were often engaged in faux outrage for domestic political purposes over purely symbolic issues. That said, at least when the Bush Administration set out to do something our allies didn’t like, it (1) did so to advance concrete U.S. interests and (2) stuck to its guns.

With the Obama Administration, neither is true. Fresh off a bizarre series of unnecessary gaffes in dealing with friend (the U.K.) and foe (Russia) alike, and after already rattling sabers and then caving on trade war threats with Canada and the EU, Obama and Congressional Democrats have brought us to the brink of a full-blown trade war with Mexico - and they are stuck trying to climb down from the ledge. Brian Faughnan has some of the background here; today’s news is the desperate scramble to avoid the consequences of the Democrats’ own policies as Mexico escalates with new tariffs for the Administration’s violation of our treaty obligations under NAFTA:

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There’s trouble south of the Rio Grande.

In 2006, Mexico elected a bright, conservative reformer as President. Felipe Calderon has attempted to open Mexico’s flagging energy sector to private investment, fight government corruption, and crack down on the illegal drug trade. He’s making some progress (albeit less than the U.S. would like) and it’s coming at a significant cost.

Throughout these efforts, President Calderon had previously been able to count on the support of the White House as he pushed for an agenda that would ultimately benefit the U.S. When Barack Obama was elected, the situation changed - most notably because Obama favored renegotiating NAFTA, which Calderon had opposed. Nevertheless, Calderon agreed to negotiate - most likely because Mexico could pursue a guest worker program as part of any deal, and could push for more favorable treatment of its exports to the U.S.

In just the last few days however, the US-Mexico relationship has taken some serious blows. Things have deteriorated so badly and so quickly, that President Calderon has accused the U.S. of perpetrating ‘a campaign against Mexico:’

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Note: I’ll be discussing this issue on Fausta’s podcast at 11:00AM Eastern time today. If you don’t have the time to listen in today, bookmark her blog and check in over there anyway.

I’ve been writing about Congress’s eagerness to violate U.S. treaty commitments by banning Mexican trucks from U.S. roads (most recently here). It’s gotten precious little attention in the U.S. press, but folks in Mexico are understandably angry that Congress voted without debate to renege on our NAFTA obligation - without even acknowledging that our own government says that Mexican trucks and truckers are as safe as those of the U.S.

Yesterday Barack Obama signed the omnibus bill, putting us formally out of compliance and giving Mexico an opening to retaliate against U.S. exports to Mexico. But just as he did with his signing statement, Obama put his hypocrisy on display by telling the Mexican government to negotiate with Congress over a replacement program!

An 18-month-old pilot program that allowed a few Mexican trucks beyond a border buffer zone died when President Barack Obama signed a sweeping $410 billion government spending bill on Wednesday. The bill barred spending on the pilot program.

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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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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…

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In his current Canadian trip, Barack Obama has attracted a lot of attention for his statement that he would like to modify the NAFTA accord to give a higher status to labor and environmental standards. There’s been some blowback from Canada, but reaction has been relatively muted. What is surprising is that the reaction in Mexico has been muted as well. Given the Mexican government’s longstanding opposition, and the likelihood that new labor and environmental standards will hurt Mexico, this is a stunning change.

Looking back a few months, Mexican President Felipe Calderon made clear after the U.S. election that Mexico opposed renegotiating NAFTA — unless it came with broad immigration reform:

Mexican President Felipe Calderon warned Barack Obama against trying to renegotiate the North American Free Trade Agreement, saying restricting commerce would only encourage illegal Mexican emigration to the U.S.

“The day access is closed, workers will jump over whatever river or wall you put there,” Calderon told business leaders today at the Asia-Pacific Economic Cooperation forum in Lima, Peru, where leaders of 21 nations are meeting…

Mexico’s Calderon was most direct when he asked about Obama’s plans to rework Nafta.

“I hope that the next U.S. government won’t make this mistake,” he said. Instead of scaling Nafta back, the agreement should be expanded to include the free movement of workers, he added.

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