Tariffs Among NAFTA Nations Not Dead Yet

As previously featured on this blog, trucking rights for Mexican companies in the US has been NAFTA’s most-enduring hot potato issue, since its ratification 15 years ago. This is tied into the US’ non-compliance with NAFTA’s international trucking provisions. While US companies already operate freely in Mexico, the inverse has not yet come to pass.

My take on this latest tariff volley is that we won’t see any meaningful compliance until 2011, especially since the issue will be a volatile one during November’s mid-term elections.

A recent editorial in Wall Street Journal relates that “The newest USA products on Mexico’s list face tariffs of 5 to 25 percent, up from zero or near zero under NAFTA. The higher tariffs likely will eliminate the Mexican market for the affected U.S. companies that export to Mexico. Washington state apples and California oranges and pistachios, among other things, will now cost 20% more in Mexico than they did last week. Cheeses from California and Wisconsin now face a 25% tariff. In all, the current round will hit products exported to Mexico from 43 states, with Delaware, Mississippi and South Dakota added to the list… Mexico’s revised tariff list adds products and subtracts others from the initial list to keep the affected imports at basically the same level. But the net number of U.S.-made products rose by 10″.

The Bush Administration in 2007 (reluctantly, it appears… NAFTA provisions called for it in 2001) launched a pilot program to allow a limited number of Mexican long-haul trucks into the U.S. and test their safety. The program demonstrated that Mexican trucks are as safe as their U.S. counterparts.

However, the pilot program was canceled in 2009.

As the USA aims to double national exports in 5 years, we must uphold NAFTA as a fair and open agreement… it’s the core of our global trading strategy and defines how we deal with our two largest trading partners and closest neighbors.

Credits and read more:
– Nitty Gritty Marketing,“NAFTA Wink-Nudge Stalls Mexico’s Trucking in US”

– Houston Chronicle coverage

– Wall Street Journal, “The Teamster Tariffs”