Foreign Affairs

Washington Democrats Trigger North American Trade War

NEW YORK — As if America’s hands were not full already — from Iran to Afghanistan to North Korea — Washington Democrats have increased tensions with our next-door neighbors. Canada and Mexico, America’s top two export markets, are embroiled in trade feuds with the U.S., both triggered by American protectionism. As global leader and decent hemispheric neighbor — especially during these economic doldrums — America immediately should rejoin Canada and Mexico on the road to free-trade.

Canadians find February’s $787 billion stimulus package as stimulating as a cold shower on a hot date. This law requires American-made construction materials in 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, even though such Canadian inputs were allowed before the Democratic Congress passed and President Obama signed this measure.

Canada began fighting this provision at Halton Hills, Ontario, where a water-treatment-equipment manufacturer called Hayward Gordon fears Washington will block its southbound exports. Ironically, such limitations will impoverish American companies that supply parts for this Canadian firm’s products. Halton Hills responded to February’s regulations with its own don’t-buy-American rules for government purchases.

Expanding this local boycott, the Federation of Canadian Municipalities voted June 6 to back localities that refuse to buy from nations that block Canadian goods and services — namely America.

“This U.S. protectionist policy is hurting Canadian firms, costing Canadian jobs, and damaging Canadian efforts to grow our economy in the midst of a worldwide recession,” Federation president and Sherbrooke, Quebec, Mayor Jean Perrault told Reuters.

The scene is equally grim south of the border.
 
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 nation’s vehicles 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, opened U.S. roads to Mexican trucks in 1995. Exasperated by Washington’s 14 years of foot dragging, including 2002’s imposition of 22 safety regulations on Mexican (but not Canadian) trucks, Mexico slapped tariffs on 90 American exports worth $2.4 billion, including grapes and toilet paper. This reportedly killed 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 4.2 percent in 2013.

Even worse, June 1 brought word that Canacar — an association of 4,500 Mexican trucking companies — filed a grievance seeking $6 billion in damages from Washington, due to the pilot program’s termination and the resulting brick wall that arose between big rigs at the border.

“We want reciprocity,” Canacar attorney Pedro Ojeda told the Wall Street Journal. “The U.S. has notoriously not kept its commitments.”

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. Arturo Sarukhan, Mexico’s ambassador to Washington, counts 45,000 border crossings by U.S. and Mexican trucks “without any significant incident or accident.”

“Mexico has been the grown up in this dispute,” says Dan Griswold of Cato Institute’s Center for Trade Policy Studies. “Our truck-ban is just an exercise in raw power based on a stereotype of Mexicans.”

Beyond anti-Mexican bias, the bigger issue here is that Democrats are the Teamsters’ hit men. Since 1990, according to OpenSecrets.org, the truckers’ union has donated $26,877,454 to federal candidates, 93 percent to Democrats. It also endorsed Obama early. The Teamsters simply purchased protection from its Mexican competitors from the best parliament and president money can buy. If this hikes costs for U.S. consumers, shrinks markets for American exporters, and creates new pitfalls in U.S.-Mexican relations, who cares? No matter what, Washington’s whores put out.


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