Discovery Institute President Bruce Chapman pointed me to a Deroy Murdock NRO piece on how Team Obama is stiffing Canada & Mexico, to placate its domestic protectionist allies.
Re Canada, DM notes:
For starters, Canadians find February’s $787-billion stimulus package as stimulating as a cold shower on a hot date. It requires American-made construction materials in all federally funded public-works projects. This “Buy American” provision would keep U.S. roads, bridges, and tunnels free of Canadian iron, steel, and other components, although such Canadian inputs were allowed before the Democratic Congress passed and President Obama signed this measure.
Re Mexico, DM writes of the cross-border trucking brouhaha:
Obama’s $410 billion omnibus spending plan defunded a
pilot program in which about 100 Mexican trucks were allowed to drive
goods into the U.S. beyond a 25-mile frontier zone. American trucks
were given equal access to Mexican destinations. (Removing goods from
one country’s trucks and reloading them onto the other’s for onward
travel has boosted transit costs anew. These eventually increase price
tags.)
Mexico correctly argues that the North American Free
Trade Agreement, which President Clinton signed in 1995, opened U.S.
roads to Mexican trucks. However, Washington kept dragging its feet. In
2002 Congress imposed 22 safety regulations on Mexican (but not
Canadian) trucks, and it was only in 2007 that the Bush administration
started the pilot program. In exasperation at the ending of this
program, Mexico has raised tariffs on 90 American exports worth $2.4
billion, including grapes and toilet paper. This will reportedly kill 40,000 American jobs. Mexico’s backlash against U.S. protectionism interrupted its unilateral reduction of average industrial tariffs from 10.4 percent in 2008 to a projected 4.2 percent in 2013.
Even
worse, June 1 brought word that Canacar — an association of 4,500
Mexican trucking companies — had filed a grievance with the U.S. State
Department seeking $6 billion in damages because of the pilot program’s
termination and the resulting brick wall that arose in front of big
rigs at the border....
Democrats claim Mexican trucks are dangerous. However, the Arizona Republic
found that between 2003 and 2007, 1.2 percent of Mexican truckers in
America were non-compliant with safety rules, versus 7 percent of U.S.
drivers. As Arturo Sarukhán, Mexico’s ambassador to the United States, wrote in the March 18 Wall Street Journal:
“During the 18 months that the program was in operation, 26 carriers
from Mexico (with 103 trucks) and 10 from the U.S. (with 61 trucks)
crossed the border over 45,000 times without any significant incident
or accident.”
Bottom Line. The new administration is moving towards what economists call "managed trade": politically-supervised trade, where politics trumps economics, in service of domestic constituencies. NAFTA--the North American Free Trade Accord, an idea spawned by Ronald Reagan & brought to fruition by Bill Clinton (over the opposition of most of his party, primarily with GOP support)--is being morphed into NAMTD--North American Managed Trade Discord. That Mexico and Canada are our two largest trading partners does not seem to faze Team Obama. Greens & unions can smile while the rest of us pay for this economic & diplomatic disaster.
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