The Washington Times
By Steve Miller, Special to The Washington Times
July 27, 2009
U.S. businesses await end to ban, retaliatory tariffs
A plan containing guidelines on getting Mexican trucks back on U.S. highways has gone through bureaucratic review, the first step toward ending Mexican tariffs on $2.4 billion worth of U.S. goods.
Implementing the plan would quell growing dissent among U.S. businesses that are hurt by Mexico’s tariffs and that continue to besiege Washington with claims that doing nothing will result in job losses. The tariffs were imposed as retaliation for legislation enacted in March that took Mexican trucks off American highways, despite the North American Free Trade Agreement’s program to let them into the United States.
"The proposal has been through the interagency process … and it is ready to go to the Hill," said Doug Goudie, trade policy director at the National Association of Manufacturers, which has advocated for the Mexican trucks.
Earlier this year, representatives from several parties with interests in the fate of the trucking program, including officials from the American Trucking Associations (ATA), the Commercial Vehicle Safety Alliance (CVSA), the Teamsters union, and state trucking inspectors, were called to meet with Transportation Secretary Ray LaHood.
The subject was, "Tell us what you want," said Clayton Boyce, a spokesman for the American Trucking Associations.
"It was not a public meeting, but everybody had a say and got to hear what each group thought," Mr. Boyce said. "The CVSA said, ‘We’ll enforce whatever you want us to,’ and the Teamsters said, ‘You need to fix a number of things, and even then we won’t support anything because it’s taking away American jobs.’ "
The ATA, he said, thinks the pilot program "was working fine."
After President Obama signed legislation that, among other things, ended the pilot program for Mexican trucks, Mexico quickly implemented the retaliatory tariffs, affecting 89 U.S. agricultural and industrial products from 40 states.
As the weeks ticked by with no action on a plan to relaunch the trucking program, growing seasons for some affected agricultural producers have come and gone.
Some of the 2,200 unionized employees of Appleton Papers are getting closer to layoffs.
The Wisconsin-based company does more than $50 million of business annually in Mexico. Since the 10 percent tariff on paper was announced in March, Appleton has fretted about laying off some of its production workers, whose pay averages about $20 an hour.
"I can’t really just say when we will have to do this, but I will say this is urgent," said Bill Van Den Brandt, manager of corporate communications at the 102-year-old firm. "We have employees here who are second and third generation. But we are fighting now against competitors who have a 10 percent price advantage."
Operating with single-digit profit margins, Appleton is part of a group of carbonless-paper producers that supply 75 percent of the market share in Mexico. The tariffs have been a gift to the competition from other countries, he said.
Companies from across the U.S. and their representatives in Washington have written letters, made speeches and lobbied to allow safety-approved Mexican trucks and truck drivers on U.S. roads.
A June 8 letter from 24 U.S. legislators to Mr. Obama noted that "many companies are being forced to shift production abroad or simply stop shipments."
"Over $1.5 billion in U.S. manufactured products and $900 million in U.S. agriculture products are impacted by the retaliatory tariffs."
California’s grape-shipping season begins this month, and tariffs threaten markets in Mexico that were worth $58 million last year. California apricots have been hit hard, with shipments down about 60 percent this year as producers fight a 45 percent tariff, said Josh Rolph, director of international trade and farm policy for the California Farm Bureau Federation.
A letter from the federation to Mr. Obama in March warned that California agriculture stands to lose up to half its overall exports to Mexico and that the market could be eliminated for some commodities.
Some companies have resorted to exploring alternatives to U.S. production.
"We continue, as any prudent business would do, looking at potential alternatives, but to date nothing has been compelling enough to put into action," said Anne Crews, vice president for government relations at Mary Kay Inc.
The cosmetics and skin care products giant is being hit with $450,000 a month in tariff charges.
Critics of Mexican trucks in the U.S., particularly trucking unions, back the ban.
The International Brotherhood of Teamsters has long been an opponent of granting Mexican trucks access to U.S. highways. As part of NAFTA, Mexican trucks were to have unrestricted access to highways, initially in the states that border Mexico – Texas, California, New Mexico and Arizona – and to all U.S. highways by January 2000.
The Clinton administration, under pressure from union interests representing U.S. truckers who claimed Mexican trucks were unsafe, blocked the trade agreement’s trucking provisions.
At a forum of organized labor in March, Teamsters President James P. Hoffa said Mexican trucks put Americans at risk because they don’t meet the same safety requirements as those from the U.S.
"The Mexican government has not held up their end of the bargain to meet U.S. standards," Mr. Hoffa said at a conference hosted by the International Labor Rights Forum, the Global Policy Network and the Economic Policy Institute. "Mexican trucks are unsafe, and Mexican drivers are not required to meet the same criteria that American drivers must meet to earn a commercial driver’s license. It’s long past time to close the border to these unguided missiles."
A Teamsters representative declined to comment on the pending proposal to put Mexican trucks back on U.S. roads.
A pilot program during the Bush administration found that Mexican trucks were as safe as U.S. trucks – safer, in some cases. A Department of Transportation study released in October found that Mexican trucks had better safety ratings than American trucks, although the department qualified its statement by noting that more trucks were needed to ensure a strong reporting standard.