Published on: 16:44PM Jul 20, 2011
By Cheryl Koompin - American Falls, Idaho
Amid all the partisan fights in Washington over budgets and debt ceilings, the Obama administration quietly solved a $2-billion problem earlier this month.
On July 6, the United States signed an agreement with Mexico that ends a vexing dispute over trade and trucks. It wipes out Mexican tariffs that have hurt potato farmers like me as well as many other Americans during the toughest economic times many of us have ever experienced.
We already face enough challenges on America’s farms, from worrying about the weather to figuring out how we’re going to pay for skyrocketing fuel and fertilizer costs. The last thing we need is interference from Washington—but that’s precisely what we received when Congress decided to break a treaty promise to Mexico.
The White House deserves congratulations for putting a stop to this nonsense. The controversy never should have erupted in the first place and it dragged on for far too long. Right now, however, I’m just glad it’s over—and I’m pleased to give the Obama administration the credit it deserves for negotiating a good settlement.
The root of the problem has been the refusal of Congress to abide by a provision of the North American Free Trade Agreement, the Clinton-era economic compact aimed at easing the flow of goods and services across the borders of Canada, Mexico, and the United States.
NAFTA has achieved its main goal of boosting trade ties with our closest neighbors. Because of the agreement, U.S. exports are up and our costs as consumers have gone down.
At the behest of special-interest groups and their allies in Congress, however, one provision of NAFTA failed to become a reality. Long-haul Mexican truckers were supposed to receive access to U.S. highways as they delivered products to American consumers who wanted them. This aspect of the treaty made economic sense because it eliminated many of the delays and inefficiencies associated with border crossings, which translate into higher prices for ordinary Americans. It also guaranteed that Mexican truckers would meet U.S. safety standards.
Just as this part of the deal was going into effect, Big Labor launched an ugly campaign against Mexican truckers, suggesting that they drive dangerous jalopies that threaten murder and mayhem on American roads. This was pure propaganda. Mexican trucks that were certified to drive on U.S. highways were as trustworthy as American trucks. Safety data proved it.
Unfortunately, the smear job worked. Congress blocked the trucks from entering the United States, even though this meant backing out of an international treaty obligation.
So the Mexican government retaliated. They legally slapped stiff tariffs on a wide range of American products, including the frozen potato products that are at the heart of my farming operation here in Idaho. They also targeted dozens of other U.S. agricultural goods, such as cherries, pears, and Christmas trees.
My farm’s sales to Mexico plummeted. Processing plants in our region laid off workers. A couple of them shuttered.
Who benefited? The Canadians. Their business went up as much as ours went down.
I was furious—not at the Mexicans, who simply wanted a fair shake, but at our own government for flouting its commitments and essentially inviting this retaliation. Farmers like me became casualties in a trade war that we neither started nor wanted.
The U.S. Department of Agriculture estimates that American businesses lost $2 billion. This was Washington’s accomplishment in the service of a special interest.
So I’m glad this madness is finally over. Better late than never.
“We have an agreement that not only will ultimately eliminate punitive tariffs, but it also provides opportunities to increase U.S. exports to Mexico and helps to expand jobs,” said Secretary of Agriculture Tom Vilsack.
The deal also restores our country’s reputation because it finally puts us in compliance with treaty obligations we had ignored for years. If we refuse to keep promises to one of our closest trading partners, other nations will be reluctant to lower tariffs on anything made in America.
Let’s hope that the Obama administration now builds upon this success and finds new ways to help us export our goods and services.
Cheryl Koompin is a partner in Koompin farms, producing commercial and seed potatoes, feed corn, fresh peas, wheat, medicinal safflower and mustard in Power County, Idaho. Cheryl is a guest author for Truth About Trade & Technology. www.truthabouttrade.org