(UPDATED COVERAGE, April 17, 7 p.m.) President Obamaâs mid-April trip to Mexico involved discussions on a trade dispute, but it remained unknown when the trading partners would resolve differences.
|U.S. President Barack Obama and Mexico's president Felipe CalderÃ³n met in Mexico April 16.Â Courtesy Imalinx, Cuernavaca, Mexico|
During a press conference April 16, after Obama's meeting with Mexico's president Felipe CalderÃ³n, the presidents said they discussed the issue, but did not announceÂ much anticipatedÂ progress on its resolution.
"My team is working with President CalderÃ³n's team to resolve this issue," Obama said during the press conference. "I'm hopeful that we can resolve it in an effective way. It's not helpful to a number of U.S. producers who are interested in selling into Mexico and are fearful that they may be subject to countervailing tariffs or retaliation."
Mexico enacted tariffs on March 19, and they affect seven fresh produce items and 81 other U.S. products worth $2.4 billion in annual trade.
The tariffs are in response to Congress ending a pilot program allowing Mexican trucks into the U.S. The U.S. had agreed under the North American Free Trade Agreement to allow Mexicoâs trucks the opportunity to operate in the U.S., but instead reinstated a blanket ban by defunding the pilot program, which had been in place since 2007.
"I said at the time that we need to fix this 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 said.
Affected fresh produce industry members are also hoping for a fix.
âThe message it sends with the U.S. walking away from its commitments with Mexico, that sets precedence for future tradeâ said Kam Quarles, vice president of government relations and legislative affairs for Washington, D.C.-based United Fresh Produce Association.
Since mid-March, the Department of Transportation and the Office of the U.S. Trade Representative have been working with members of Congress to find a solution that works for both countries. Congressâ reasons behind cutting the program were mainly safety concerns, backed by influential groups like the Teamsters Union.
âWhatever fix is put in place canât contradict Congressional intent in deciding to defund the old program,â Quarles said. âCongress could always reconsider, and as a practical matter from our point of view, the U.S. needs to hold up to the NAFTA agreement, and that would involve reconsideration.â
Many were hopeful Obama would have at least an interim plan ready to present to Mexicoâs president Felipe Calderon during his meetings, although the cross-border trucking issue is just one in a lineup that includes immigration, a U.S. assault weapons ban, border drug trade and the economic crisis.
Ray LaHood, transportation secretary, sent the Department of Transportationâs recommendations for ending the NAFTA trucking dispute to the White House April 13, according to media reports. The details of those recommendations were not released as of April 16.
âUltimately, the Department of Transportation will be the lead agency on this,â Quarles said.
Produce industry members affected by the tariffs continue to communicate with their constituents on Capitol Hill and try to relay the potential effects of the tariffs to influential parties. It was estimated that the tariffs would affect $900 million worth of agricultural products.
The pear industry, the only one to be hit with tariffs in the middle of its export season, has been able to export only a little more than two-thirds its normal volume of pears to Mexico since the 20% tariff was implemented, said Jeff Correa, international marketing director for Pear Bureau Northwest, Milwaukie, Ore.
âMexico has become a tremendous customer of U.S. food producers over the last decade and a half because NAFTA reduced import taxes,â said Francisco Conde, director of communications and special projects for North Americaâs Super Corridor Coalition Inc., Dallas.
The organization supports infrastructure and policies that promote free trade among the U.S., Mexico and Canada.
This conflict brought U.S.-Mexico trade back to pre-NAFTA levels on the items selected for tariffs, and it will take an agreement between Mexicoâs government, the U.S. administration and Congress to move forward again.
âItâs yet to be seen. Obviously, this is a step in the right direction and weâre hopeful there are more to come,â Quarles said.âThe Department of Transportation is moving forward with a fix, but the question is whether that fix will be supported by Congress.â