Administration could hurt international trade
FARGO, N.D. -- President Obama's initial forays into trade policy suggest he's been appropriated by protectionists and union bosses. His hints about tampering with the North American Free Trade Agreement have raised eyebrows in Canada, the United...
FARGO, N.D. -- President Obama's initial forays into trade policy suggest he's been appropriated by protectionists and union bosses. His hints about tampering with the North American Free Trade Agreement have raised eyebrows in Canada, the United States' largest trading partner.
Now, he's apparently acceded to demands of big labor and scrapped a pilot project that has permitted Mexican trucks and truckers limited access to U.S. highways. The Mexican government responded immediately with the threat of slapping tariffs on 90 U.S. industrial and agricultural products.
The last thing the United States needs in a recession is a trade war, but that's what the Obama administration will get if it continues to pursue protectionist policy.
Exports are the lifeblood of major sectors of the U.S. economy, not the least of which are value-added farm products and manufactured equipment from states such as North Dakota.
The nonsensical "buy-American" provision in stimulus legislation passed by the Democrat-
controlled Congress has many U.S. trading partners preparing to respond to the change in American policy. The result could be further damage to U.S. businesses and industries, already hurt by the global recession.
To be sure, concerns about the safety of Mexican trucks and the capabilities of Mexican truckers should not be minimized. But among the pilot program's purposes was to assess those problems and seek solutions. And only 100 trucks and 25 Mexican firms were involved in the latest version of the program.
But no pilot program likely will mean no effort to raise Mexican standards, which looks exactly like what opponents of Mexican trucking want.
Among them is Sen. Byron Dorgan, D-N.D., who has opposed the Mexican program from the start, but now says he's willing to work with the administration to address safety concerns. That's a convenient and empty commitment when the pilot program designed in part to assess Mexican trucking has been scuttled.
NAFTA is not perfect. No trade agreement is. But the alternatives -- tariffs, trade wars -- are far worse. Mexican trucking might not be as competent as the U.S. industry, although opponents of the pilot program are hard-pressed to find safety violations, driver drug use or sloppy log-keeping in any more frequency than among domestic drivers.
The Obama administration, its allies in Congress and big labor seem to be moving toward a trade strategy that will batter a U.S. economy already in recession. The president, Dorgan and even the International Brotherhood of Teamsters are giving lip service to working with Mexico to make sure "its drivers and trucks are safe enough," but the reality is the big unions just saw their political investment pay off.