Tuesday, March 24, 2009

Talk about shades of Smoot-Hawley, the 1930 tariff act that was designed to protect American jobs but, not too surprisingly, crippled industries relying on international trade when other nations retaliated. Production kept on plunging and unemployment kept on rising, extending the Depression. In today’s extremely global economy, we shudder to think how much worse the consequences today might be.

The Mexican trade war may just be getting revved up, thanks to the Obama administration and the Democrat-controlled Congress ending a Bush administration pilot program that allowed a limit of 97 Mexican long-haul truck drivers into the United States (whereas, under NAFTA, all Mexican trucks meeting reasonable road standards should have been allowed access). These 97 Mexican trucks passed U.S. safety inspections and in fact compiled a slightly safer record than U.S. trucks. With so few Mexican trucks and the short duration of the program the findings can’t be said to be statistically significant. But shouldn’t the encouraging results let the pilot program go on a little longer before making further decisions on Mexican truckers in contravention of NAFTA?

Unfortunately, that is not how the Teamster’s Union reasons. The solution for the union and its supporters isn’t to get more information, but simply to cover their eyes and ears and say that they want no more information. Instead, they use what seem like phantom safety concerns to argue we stop letting the 97 Mexican truckers into the U.S.

The Mexican government has shown remarkable restraint so far. Mexicans have had the legal right to impose sanctions for years due to our limiting of their trucks, and their recent 10- to 45-percent tariffs on 90-plus minor U.S. products in retaliation for the ending of the trucker pilot program have thus far avoided going after the major commodity of corn. In 2007, Mexico was a fairly close second behind Japan in buying our corn exports, buying 19 percent of the corn. One important reason: NAFTA got rid of protections on the corn market.

Why should farmers and producers of over 90 other products lose jobs to protect Teamster truck drivers and make consumers pay higher transportation prices?

Unfortunately, the Mexican trade war looks to just be the beginning of a long list of trade problems being created by the Obama administration. The administration is moving toward a trade war with China to enforce its views on global warming. And the misnamed “Stimulus” package included a “Buy American” provision that rankles other countries.

Wasn’t Mr. Obama going to be the “international” president who was going to get the rest of the world to love us? The path to improving relations does not involve destroying jobs in other countries as well as in our own.

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