Hot Topic: The U.S.-Mexico Trade Dispute, New Product Tariffs
by Christina Lee on March 30th, 2009
The Department of Transportation vowed last week to settle a rising trade dispute between U.S. manufacturers and Mexican trucking companies, over the ability to cross borders while exporting.
President Obama signed into law March a $410 billion spending bill and with this, a provision removing access within the country for about 100 Mexican trucking companies. Less than a week later, the Mexican government responded by implementing tariffs on $2.4 million worth of U.S. goods.
Such tariffs, ranging from 10 to 45 percent, apply to almost 90 items from 40 states. More than a third of them target food products, though they also apply to plastic kitchen and tableware, precious metal jewelry and sunglasses.
Transportation Secretary Ray LaHood met with lawmakers last Tuesday, to discuss a way to grant trucking companies access across the U.S.-Mexico border while fulfilling safety requirements.
“What we want to do is make it a program Congress feels good about,” he said.
Such access is required by the 1994 North American Free Trade Agreement, as it seeks to remove most trade barriers between Canada, Mexico and the United States. Trade policies once limited Mexican truck companies to traveling within a narrow zone along the border, until the Bush administration enacted greater access to U.S. roads.
The National Association of Manufacturers complains that the tariffs place at least 17,000 manufacturing jobs at risk. But the Mexican government argues that the United States did not consider their country’s economic wellbeing either.
“Mexico would expect that at a time of global recession and economic distress, the U.S. would play by the rules, fulfill its international treaty obligations and sure that bilateral trade is a level playing field, rather than erect trade barriers that undermine much-needed incentives to foster growth,” said Ricardo Alday, Mexican Embassy spokesman.
Mexico is now the third largest U.S. trading partner, behind just Canada and China. Last year’s trade between Mexico and the United States raised $368 billion.
For a complete list of products and new tariffs, visit the International Trade Administration Web site.