Mexico’s announced tariff hikes testing Obama on NAFTA, analysts say

According to the analysis, the U.S. now will have to reconsider its position on NAFTA “and wider commitments to free trade.” It added that although Obama has advocated a renegotiation of NAFTA, other concerns have shifted his focus away from it.

The Trucker Staff

3/17/2009

Mexico’s announced tariff hikes on up to 90 U.S. exports to Mexico in response to the halting of the Mexico truck pilot program is testing President Barack Obama’s “vague position” on the North American Free Trade Agreement (NAFTA), says a recent trade analysis.

In a statement by IHS Global Insight, analysts said Mexico’s action raises the spectre of “tit-for-tat protectionism as it presses for the resumption of NAFTA-mandated cross-border access for its trucks.”

Obama last week signed the $410 billion FY 2009 appropriations bill that included language to end the year-and-a half-long Cross Border Demonstration Project.

The president later told the U.S. Department of Transportation to work with the U.S. Trade Representative and the State Department, along with leaders in Congress and Mexico, to propose a new trucking project “that will meet the legitimate concerns of Congress and our NAFTA commitments.”

According to the analysis, the U.S. now will have to reconsider its position on NAFTA “and wider commitments to free trade.” It added that although Obama has advocated a renegotiation of NAFTA, other concerns have shifted his focus away from it.

The analysis quoted a Reuters news source as saying the tariff sanctions probably won’t include wheat, rice, beans and corn but will be applied to 90 U.S. agricultural and manufactured goods originating from a total of 40 U.S. states.

“It is not yet clear when the sanctions will come into force and which items will definitely be affected,” the analysts noted.

They added that trade might be high on the agenda when Secretary of State Hillary Rodham Clinton visits Mexico this month.

The Associated Press reported that Clinton's agenda will be broad, including the global financial crisis, climate change and trade, but will likely be dominated by discussions on the Merida Initiative, a Bush administration project to counter narcotics trafficking and crime in Mexico and elsewhere in Latin America that Obama has said he wants to revamp.

Clinton, on her third trip abroad as the top U.S. diplomat, will visit Mexico City and Monterrey on March 25-26 to underscore the Obama administration's commitment to helping Mexican authorities deal with the deteriorating situation and violence, the State Department said.

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