Mexico hits out at US with tariffs on 90 products

AP , MEXICO CITY

Wed, Mar 18, 2009 - Page 7

Mexico said on Monday it would increase tariffs on about 90 US products in retaliation for last week’s decision to end a pilot program that allowed some Mexican trucks to transport goods in the US.

Mexican Economy Secretary Gerardo Ruiz Mateos said the US decision violated a provision of the North American Free Trade Agreement (NAFTA) that was supposed to have opened cross-border trucking by January 2000.

“We consider this US action to be wrong, protectionist and a clear violation of the treaty,” Ruiz Mateos told reporters. “By deciding to protect their trucking industry, they have decided to affect other countries and the region.”

The measure will affect about US$2.4 billion in trade involving approximately 90 agricultural and industrial products from 40 US states. Ruiz Mateos said the department later this week would publish a list of the products, which he said were chosen to represent a large number of US states and significant trade items.

He did not specify how much tariffs would be increased, but said “the retaliatory measures are the cost the United States is going to have to pay for failing to fulfill its obligations under NAFTA.”

The action alarmed Representative Kevin Brady, the ranking Republican on the trade subcommittee of the House Ways and Means Committee. Wheat and beef are two of his states top three exports.

“We’ve got a tough economy. We are going to lose sales, [agricultural] sales of exports that we are selling into Mexico and that may well go to other countries,” he said. “If you raise [duties], our wheat or beef may not be competitive to Mexico consumers.”

A pilot program begun in 2007 that had allowed a few Mexican trucks beyond a border buffer zone died last week when US President Barack Obama signed a sweeping government bill that barred spending on it.

But the administration said Obama had asked the office of the US Trade Representative to work with the US Department of Transportation, State Department and Congress to create a new trucking program.

Representative Sander Levin, a Democrat who chairs the Ways and Means trade subcommittee, said he was “disappointed that the Mexican government has decided to retaliate, given that the Obama administration has publicly committed itself to working with the Congress and the Mexican government to address this and related issues.”

Activists and industry associations in the US had argued that Mexican trucks were unsafe.

“No trade agreement should obligate us to compromise our highway safety,” said Senator Byron Dorgon, a Democrat.

But Ruiz Mateos said the Mexican trucks crossing the border were safe: “The Mexican trucks even exceeded the US safety standards in some cases.”