Obama's Mexico Agenda: Trucks, Tariffs and Swine Flu

Leaders gather to plan swine flu response, fix costly NAFTA spat.

August 9, 2009, 7:29 PM

GUADALAJARA, Mexico, Aug. 9, 2009 — -- As the leaders of the United States, Mexico and Canada gathered this evening, they were to talk about normal summit issues such as climate change and economic recovery -- including resolving a tariff dispute centered on the issue of Mexican trucking in the United States.

But issues of life or death also were on the table.

As President Obama and Mexican President Felipe Calderon flew to Guadelajara, Mexico, first and foremost on their agenda were preparations for flu season and the H1N1 "swine" flu -- the outbreak of which started in Mexico.

White House homeland security czar John Brennan said it is crucial to collaborate with Mexico and Canada on vaccine development and distribution, and ways to communicate with populations on how to best prevent the spread of the illness.

"I think everybody recognizes that H1N1 is going to be a challenge for all of us," Brennan said Friday, "and there are people who are going to be getting sick in the fall and die."

Another life-and-death issue on the table is President Calderon's war against the Mexican drug cartels, which only appear to be getting stronger.

Drug-related deaths in Mexico have been rising since Calderon became president in December 2006, and passed 12,000 this month.

Despite some human rights groups' criticisms of the behavior of the Mexican army, Obama stands firmly with Calderon as the cartels have increasingly branched out into the United States.

"We have responsibilities to reduce the trafficking of guns into the South that help strengthen these cartels, and the flows of money and money laundering," Obama said June 29.

They will also discuss an issue of livelihood -- unemployment in the United States caused by $2.4 billion in Mexican tariffs on U.S. goods.

It is all tied to a dispute over whether to allow Mexican trucks on U.S. roads.

Mexico Hits Back on Truck Ban With Tariffs

In the 1994 NAFTA agreement, the United States agreed to allow Mexican trucks to haul their loads directly into the country to expedite delivery -- as long as U.S. safety standards were met.

Two years ago, the trucks began rolling across the border, and were given a good safety rating by the Department of Transportation.

However, members of Congress and the Teamsters Union complained the trucks were unsafe.

Last spring, Congress inserted a provision in the budget bill to kill the trucking program.

"Allowing Mexican long-haul trucking into our country is going to diminish safety on our highways," said Sen. Byron Dorgan, D-N.D.

In retaliation, Mexico slapped on the tariffs, which are devastating businesses that sell products to Mexico. The tariffs range from 10 percent to 45 percent and affect dozens of U.S.-made products, including grapes, Christmas trees and paper products.

Paper maker Appleton Inc., of Wisconsin, laid off 10 percent of its 2,500 employees last year and slashed benefits just to keep going.

"I guess I would say we were treading water, given the recession," said Kent Willitts, Appleton's vice president of marketing and strategy. "This is like someone handing you a brick and saying, 'Here, keep treading water.'

"We don't even participate in the trucking program and yet, one day we wake up and our products are penalized 10 percent," he added.

It has the remaining employees still on the job worried, too.

"The lay-offs came very, very close to me," said Bill Saler, a steelworker for Appleton. "If we lose any more business, I will be the next to go."

Half a country away, California grape grower John Zaninovich said he feared he might lose more than $1 million this year.

"Already, we would have shipped probably in the neighborhood of 25,000 boxes down there [to Mexico]," Zaninovich said. "To this date, we have shipped zero."

Obama's Shift on Mexican Trucks

When Obama was a senator, he voted against the Mexican trucking program. But now, as president, his position seems to have shifted.

"We need to fix this," he said in April, "because the last thing we want to do at a time when the global economy is contracting and trade is shrinking is to resort to protectionist measures."

Obama may have to figure out a way to uphold the U.S. obligation to NAFTA agreement while also upholding his earlier safety concerns. But his administration has not yet said how it intends to do that.

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