Mexican Trade War
Aug 27, 2010
We have a weak national economy with unemployment approaching ten percent but we don’t seem to take the obvious steps to improve the situation. In fact, we do the opposite. We have unnecessarily sparked a trade war with our neighbor to the south, Mexico.
Mexico has imposed a 20 percent tariff on 26 previously duty-free products, including ketchup, cheese, fruits, vegetables, chocolate, and pork – yes, pork. Mexico is our biggest pork market. Experience tells us that we will lose 80 percent of those markets to other countries now. There go the jobs.
It is our fault. We asked for this retaliation because we have refused to live up to the terms of the North American Free Trade Agreement. The Agreement specifies that Mexican trucking companies are allowed to haul freight into the U.S. But, for 15 years, we have not allowed their trucks in. Why, you ask? I give all the credit to the Teamsters and James Hoffa and a powerful list of Members of Congress that are “bought and paid for” by the Union. And the Congress wonders why they are held in such low esteem. President Bush began to implement the Free Trade Agreement in 2007 only to have President Obama slam the door when he came to town. If we aren’t going to live up to the trade agreements that we negotiate, who is going to want to deal with us?
President Calderon put the issue on the table when he met with President Obama in May. Did we do anything? No – and now, the dispute escalates.
President Obama said he wanted to double our trade exports in five years. Well, where is the plan to do that? We aren’t doing anything and other countries are taking our markets away from us.
We are just not fixing our trade problems and seeking opportunities as we should. Earlier this year, instead of fixing a cotton program dispute with Brazil, we just bought them off by giving them 147 million dollars to not retaliate against us.
I hope that with the obvious need to create jobs the President will become much more proactive in dealing with our trade issues.
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
Until next week, I am John Block in Washington.