Mexico Wages War on the USA

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Global Trade

Well not quite but in trade terms it could be likened to the opening salvo. Mexico raised tariffs on a wide range of some 90 US-made industrial and agricultural goods estimated to be worth $2.4bn earlier this week according to the Financial Times. Mexico won a judicial ruling in 2001 under the NAFTA agreement but had held off implementing the ruling while the US ran a pilot project allowing some Mexican trucks to make deliveries into the US, often only on short runs to clients across the border. But following opposition from many lawmakers, notably Democrat Sen. Byron Dorgan from North Dakota and the Teamsters Union who claimed Mexican trucks were less safe than US trucks, Congress killed the pilot program. “The right response from Mexico would be to make sure its drivers and trucks are safe enough to use our highways without endangering our drivers,” Teamsters President James Hoffa said to the Wall Street Journal. Presumably they did not take notice of a US Dept of Transport study that concluded actually it was the other way round, the 29 carriers and approximately 100 Mexican trucks involved in the pilot had proved to often be safer than their US counterparts. According to a Mexican source, transportation authorities estimate that, as of June 2008, 18,000 Mexican trucks have traveled on U.S. roads as part of the program, without serious incident.According to Reuters last year, Mexico was the top export destination for US rice, the No. 2 destination for soybeans and the third largest buyer of US wheat, according to US Agriculture Department data, although elsewhere Mexican spokesmen have said they will avoid these principal products. Republican Senators, particularly in the border states most likely to be affected are up in arms, praising the Mexican governments’ patience in sticking with the pilot program and stating the US is in clear violation of its NAFTA obligations. Exports from some 40 states are thought to be impacted by the tariff changes although a full list of the products is not expected until later this week.The US exports a wide range of finished products, parts and components to Mexico each year with metal components featuring prominently. Electrical parts top the list at $10bn. Vehicle parts are a close second at $9.4bn. Finished metal shapes around 7th at $4.75bn and industrial machinery 10th at $3.9bn. A full list is available at the following website Internationaltrade.suite101.com. Our colleague in Juarez tells us there is not much local support for raising tariffs however. It is widely seen as damaging to trade and likely to add inflationary pressure ” trust the man in the street to take the pragmatic view.–Stuart Burns

Comments (5)

  1. Porter Corn says:

    As the “Mexican source” mentioned in the article (not true. Simply an American living in Mexico who is interested in the truth) let me say this has nothing to do with “truck safety”, but simply the ego of a little man who is not allowed, under Mexican law, to organize or promote his union in Mexico.

    Think that’s a crock? Consider Canadian trucks have been operating in the US for almost 30 years, with no objections from the unions. But then, they are allowed to organize in Canada

  2. stuart says:

    Mexican Source can mean a Mexican company, organisation or individual living in Mexico, maybe we should have given your website address http://www.mexicotrucker.com, rather than reference to a mexican source but for the record we don’t believe that makes our statement untrue. Having said that Porter we are in complete agreement with your position regarding the Teamsters objections on the grounds of safety being unfounded – note our reference to the US DofT study which supports your point. MetalMiner is naturally predisposed to free markets and low or zero tariff barriers, so the objective in writing this piece was to prompt discussion on how unfair the cessation of the program to allow access to US routes is for the Mexican trucking industry. It that respect it would seem we have been successful, so thank you for your comments and good luck with http://www.mexicotrucker.com.

  3. RecycleBill says:

    “Presumably they did not take notice of a US Dept of Transport study that concluded actually it was the other way round, the 29 carriers and approximately 100 Mexican trucks involved in the pilot had proved to often be safer than their US counterparts.”

    Interesting… were these 100 Mexican trucks compared to 100 US trucks that were specifically picked to be a part of the pilot program or was this a case of 100 Mexican trucks whose owners knew in advance that they were being watched compared to random lots of US trucks whose owners might not have even known they would be used in the study?

    I suspect the 29 Mexican Trucking Companies involved in the pilot program all knew they were a part of the pilot program and would have done everything in their power to slant the results in their favor.

    Having spent 28 years in freight I’ve seen these Mexican trucks first hand. Do you know that most Mexican fleets are built from rolling stock deemed unsafe and thus retired from US fleets before being sold to Mexican truck dealers?

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