Last week’s decision by Mexico to place tariffs on many U.S. goods is a clear warning that the United States is not keeping up its end of the North American Free Trade Agreement.
The tariffs, ranging from 5 percent to 20 percent, have been imposed by Mexico on U.S. goods such as fruit and cheese as well as some pork products. Mexico last week said they may alternate tariffs on as many as 99 U.S. products.
The standoff has been brewing for some time. The NAFTA dispute first erupted 15 years ago when the U.S. refused to implement a Mexico-U.S. cross-border plan amid opposition from U.S. labor groups.
The dispute is based on U.S. access for Mexican trucks that some, including the Teamsters Union, say are unsafe to operate on U.S. highways. U.S. officials have vowed repeatedly to resolve the standoff.
President Obama has said he is committed to finding a solution to the Mexico trade dispute. U.S. Trade Representative Ron Kirk also said that he is committed “to resolve the dispute and end these duties.” With resolve like that, you would think that the problem could be remedied in quick order.
Mexico’s imposition of the tariffs last week shows you how far the “commitment” has gotten us. If the United States is truly committed to NAFTA, a dispute of this nature could be resolved quickly in a series of meetings between U.S. and Mexican trade officials.
With commitment such as it is now, U.S. agriculture stands to lose millions in trade opportunity.
Agricultural commodity groups have worked tirelessly to develop and nurture the Mexican export market. It comes as no surprise that many groups are becoming exasperated with the lack of U.S. action to end the trade dispute. “It is deeply disturbing to now see our exports hindered by lack of U.S. action to resolve such a long-standing issue with our most important trading partner,” says Tom Suber, president of the U.S. Dairy Export Council.
You may wonder “where is that commitment U.S. officials have talked so much about”?
Mexico is the second largest export market for U.S. pork, according to Nick Giordano, vice president for international affairs for the National Pork Producers Council. “The bottom line is the U.S. has to fully implement its obligations” under NAFTA, Giordano says. “The longer the U.S. takes to implement NAFTA, the more the U.S. is going to lose exports and jobs.”
The potential loss from the dispute with Mexico affects more than just dairy and pork products. U.S. farmers “sell a huge amount of food and farm goods to Mexico, so we have a lot to lose,” says Bob Stallman, president, American Farm Bureau Federation. “As the retaliation list continues to grow, it comes at a steep cost to U.S. agriculture.”
With the problem festering for years, those who say they are “committed” to finding a solution to the trade impasse are giving lip service to those who lose business due to the tariffs. Although Mexico likely has deficiencies in the dispute also, it is no excuse for the U.S. to ignore its own responsibilities under NAFTA.
U.S. and Mexican officials should come clean on the issue and tell it like it is. Summarize the issues that need to be resolved and get down to work. Hard-working American farmers deserve more than half-hearted promises about “commitment.”