Rarely a day goes by without a new story of troubles roiling our southern border. Violent drug gangs outgun the Mexican army, and the Mexican government struggles to restore civil society and rule of law.
Further south, police and demonstrators face off in the streets of Honduras. Avowed U.S. enemy Hugo Chavez uses his oil wealth to prop up sympathetic regimes in Bolivia and Nicaragua, while supporting an insurgency against a pro-American government in Colombia. As the leader of the global economy, the United States thrives in a stable world -- and Latin America becomes more chaotic by the day.
One effective way we can help restore stability to Latin America is through economic engagement. But instead of extending a stabilizing hand, we have largely turned away, as evidenced by stalled trade agreements with Colombia and Panama.
The latest insult to our Latin American neighbors was Congress' decision to prohibit Mexican trucks from coming into America, despite the fact that those trucks usually roll back to Mexico laden with American exports.
In fact, trade between the United States and Mexico totaled $368 billion in 2008, making Mexico our third-largest U.S. trading partner. One would think that in difficult economic times our legislators would be doing everything in their power to open new markets to American goods, not close them.
Of course, Mexico did not take lightly to the U.S. closing our border to their trucks -- that's why they're called "trade wars." Citing United States' failure to its NAFTA commitments, the Mexican government instituted retaliatory tariffs on $2.4 billion worth of U.S. manufactured and agricultural exports on March 19th. The tariffs, which are allowed under the rules of international trade, range from 10 to 45 percent.
This protectionist tit-for-tat has impacted a range of U.S. companies trying to compete in the Mexican market. A June 8th letter from 24 U.S. legislators to President Obama noted that "many companies are being forced to shift production abroad or simply stop shipments."
"Over $1.5 billion in U.S. manufactured products and $900 million in U.S. agriculture products are impacted by the retaliatory tariffs," the letter continued.
What's worse is that companies are preparing to close lines in the U.S. and shift production to Canada, where duty-free treatment continues. The shift in production will cost local communities jobs with a ripple effect all the way along the supply chain.
Mexico has said it will not remove the tariffs until the U.S. government reinstates the cross-border program or otherwise adheres to the NAFTA accord, under which Mexican trucks are permitted to enter the U.S. (and U.S. trucks may likewise enter Mexico.)
Thankfully, Congress now has an opportunity to hit the "reset" button on this needless and economically harmful dispute. Today, Senate Transportation-HUD Appropriations Subcommittee will mark up its draft fiscal 2010 spending bill. As part of this process, they have the opportunity to reauthorize Mexican trucks to come across the U.S. border.
I urge the lawmakers to make the reauthorization, and hope they choose the economy, our consumers and our national security over narrow protectionist interests.
Gary Shapiro is the president and CEO of the Consumer Electronics Association.
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