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Trade war with Mexico: Where protection leads

Post by Patrick O'Callahan on March 30, 2009 at 7:53 pm |
March 30, 2009 7:53 pm

This editorial will appear in tomorrow’s print edition.



This state will be collateral damage if Congress placates unions at the expense of international trade.


Just what we need; a trade war in the middle of a recession.


Congressional Democrats blundered into that folly earlier this month when they used the recent $410 billion spending bill to bar Mexican trucks from the United States. Mexico has responded by slapping punitive tariffs on $2.4 billion worth of goods from this country – including Washington pears, cherries, apricots and frozen potato products.


This is exactly why economically illiterate protectionists shouldn’t be allowed anywhere near American trade policy.


Background:


Originally, Mexican cargo had to be unloaded into a warehouse then transferred to a U.S. truck after crossing the border. The requirement was costly, inefficient and insulting. The United States agreed in concept to open its roads to Mexican trucking when it signed the North American Free Trade Agreement in 1994.


The Teamsters union and others did not like the prospect of competition with Mexican truckers. They raised legitimate safety and security issues, and Mexican trucking remained barred from this country as standards were developed.



That done, Congress approved a pilot project under which a group of Mexican carriers would be able to move freight through the United States with a limited number of trucks. But opponents continued to rail about unsafe Mexican trucks on the road, and Congress has now killed the experiment through a provision in the spending bill.


The complaints are absolutely groundless. The trucks were closely tracked during the pilot project. Last year, the Federal Motor Carrier Safety Administration reported that the participating Mexican trucks did not have a single accident. It concluded that their safety record was in fact better than that of U.S. trucking fleet.


The Mexican government is understandly angry that the pilot project was summarily shut down for no defensible reason. Hence the tariffs. We would almost applaud Mexico’s reaction if Washington weren’t so threatened by a trade war with this country’s third largest trading partner.


Washington pear, cherry and apricot orchardists, for example, stand to lose $6.1 million if the dispute isn’t resolved.


U.S. Transportation Secretary Ray LaHood is trying to prevail on Congress to placate Mexico by reviving the pilot program. That’s good, but Congress never should have killed it in the first place. Some adult in the Democratic caucus should have pointed out the likelihood of Mexican retaliation – assuming leadership cares about such trifles.


If the new Congress sees trade as a zero sum game in which the overriding goal is to protect constituents from foreign competition, this country is in for a very long recession.

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