Trucks wait to enter the United States from Mexico south of Nogales. A U.S. decision to prohibit Mexican trucks from traveling more than 25 miles north of the international border has sparked a trade war.
For 14 years, the United States has ignored a key provision of the North American Free Trade Agreement – a move that has harmed Mexico’s ability to ship its products into the United States.
Now Mexico is retaliating, slapping tariffs on a wide variety of American goods shipped from the United States to Mexico.
The United States is clearly wrong in this international trade war, which will produce no winners. The battle will mean higher costs for Mexican products in the U.S. and decreased demand for American products in Mexico.
At the core of the agreement is a NAFTA provision that allowed trucks from the United States and Mexico to cross the border and deliver goods in both countries beginning in 1995.
Both nations agreed with the provision and Mexico has complied, but the United States has not. This is the kind of contempt for international law that isolated the United States and marked the last few years of the Bush administration. And now it is being continued by President Obama.
A provision of NAFTA allowed U.S. and Mexican trucks reciprocal access to each other’s markets, saving fuel and money as produce and other products would not have to be unloaded and reloaded near the border before reaching their final destination.
When the U.S. refused to allow Mexican trucks to travel more than 25 miles north of the border, an international arbitration panel ruled against the United States. The Teamsters union fought to keep the ban in place, citing safety and environmental concerns.
To allay those sometimes-legitimate worries, the Bush administration allowed a pilot program under which some Mexican trucks, screened by U.S. officials, were allowed into the United States. A review of the program showed those trucks had a safety record equal to that of American trucks and met the same environmental standards.
Yet the Teamsters were not mollified. Despite their stated safety concerns, they clearly were more worried about a threat to Teamster jobs. So recently Congress passed and Obama signed legislation to ban Mexican trucks from the United States.
Last week, Mexico struck back, imposing higher tariffs on $2.4 billion worth of U.S. exports. The list of about 90 U.S. items affected is diverse, including Christmas trees, sunglasses, strawberries, toilet paper, pet food, pears, onions and soy sauce.
Americans who grow or manufacture those products will be hit hard, as the goods will cost more and be less likely to be sold in Mexico.
This standoff must be resolved. The United States should abide by terms of NAFTA, allowing Mexican trucks to enter the United States providing they meet all standards imposed on U.S. trucks. Mexico should then drop its tariffs on U.S. goods.
Mexico is our No. 3 trade partner. It benefits neither country to engage in a retaliatory trade war that ends up increasing prices for consumers in both countries.