SPECIAL REPORT: Lawmaker urges action on ‘inappropriate’ tariffs

| 6/24/2009

Wednesday, June 24, 2009 – One U.S. lawmaker wants to know what is going to be done to Mexico for “slapping” tariffs on more than 90 U.S. products because the long-haul cross-border program with Mexico was ended.

Rep. Brad Sherman, D-CA, wrote a letter to Ron Kirk, the U.S. Trade Representative, asking what actions his office are taking to rectify these lopsided, “inappropriate” tariffs imposed by Mexico.

Sherman points out in his letter that there are several problems with the tariffs Mexico imposed nearly three months ago.

He starts by pointing out that the North American Free Trade Agreement limits maximum “sanctions” to pre-NAFTA levels.

Mexico has imposed tariffs of $2.3 billion, which according to Mexican officials will generate approximately $427 million in tariff revenue. Mexican officials claim that is roughly the amount of income that Mexican truckers are losing by being denied long-haul access to the U.S.

“However, with the information available regarding the Mexican trucking fleet and relative cost structures, an independent assessment, conducted by Public Citizen, has estimated Mexico’s highest possible annual losses to be between $69 million to $227.6 million,” Sherman wrote in his letter to Kirk. “That is to say that Mexico’s real losses are 16 to 53 percent of what is being imposed.”

The fact that those apparently inequitable tariffs have been in place with seemingly no activity from the U.S. Trade office obviously isn’t sitting well with Sherman either.

“It has been nearly three months since Mexico slapped these sanctions against U.S. trade. If Mexico has imposed tariffs that greatly exceed the actual damages in this matter, I would assume that the USTR is working to seek immediate relief for U.S. producers,” Sherman wrote.

Sherman then ticks off a list of questions regarding the Trade office’s action or inaction on the situation.

He wants to know if the Trade office has attempted to calculate the impact of the tariffs to see if Mexico’s numbers are legitimate. He wants to know if there are delays in getting the needed info to calculate the impact of the tariffs.

He also wants to know what the Trade office is doing to initiate a NAFTA sanctions-level challenge. If there’s not going to be a challenge, Sherman wants to know why.

“American businesses and workers may have been unfairly harmed by inappropriate tariffs recently levied by the Mexican government,” Sherman wrote in closing. “I look forward to hearing what steps the USTR is undertaking to bring relief to U.S. producers.”

Sherman pointed out in his letter that the U.S. had every right to close down the long-haul, cross-border trucking program with Mexico.

“There remain many outstanding issues with respect to Mexico’s domestic trucks’ safety and emission standards, driver licensing, insurance and data-keeping systems,” Sherman wrote.

“The Mexican government has yet to take responsibility to raise its level of safety enforcement for Mexican trucks and drivers,” Sherman wrote. “Until that happens, it is unlikely that the United States alone can ensure that all Mexican trucks and drivers entering the U.S. meet our standards for safety.”

Rod Nofziger, OOIDA’s director of government affairs, applauded Sherman’s efforts in holding the Trade office’s feet to the fire on the tariff issue.

“In addition to questioning the amount of Mexico’s tariffs, Congressman Sherman should be commended for questioning the appropriateness of that government’s actions,” Nofziger said.

If Mexico wants a cross-border program with the U.S., Nofziger said it’s going to take one thing: compliance.

“The onus should be on Mexico to raise their regulatory standards, not on the United States to lower ours,” Nofziger said.

“The tariffs are meant to focus attention away from the fact that Mexico’s regulatory standards for trucking are to say the least paltry in comparison to the requirements currently in place for U.S. trucking companies and truck drivers.”

To read the full letter, click here.

– By Jami Jones, senior editor