Saturday, January 08, 2011

Removing the trucking barrier to trade

Obambi is going to turn around and stop violating the trade agreements with our third-largest trading partner, Mexico. He changed. Only because he lost the 2010 election. The Republican gains in Congress make the difference. Investors Business Daily
That's a good thing, because it will restore U.S. trade ties with our third-largest trading partner to normal. And it won't be tough for Mexico to measure up. Contrary to common perception, legal Mexican trucks have consistently passed U.S. safety inspections, outperforming even U.S. trucks. Since 2003, just 1.2% of Mexican truck drivers on U.S. roads were not out of compliance; for American drivers, the figure is 7%. As much as the Obama administration may tout the tiny changes in the truck program as real improvements, it's window-dressing. The new program is pretty much the same one that Congress, in a fit of protectionist pique, halted in 2008. What changed is Congress. Restoring the truck program will help restore U.S. trade to its normal pre-recession vigor, with a freer flow of goods and services between the U.S. and Mexico. It gives the U.S. a fighting chance of doubling exports in the next five years, one of President Obama's goals. For U.S. companies, that means transport costs will fall by some $400 million. They won't have to pay two trucking companies for a single shipment to Guadalajara, with all the added cost that entails. It will also make U.S. companies more competitive, because they'll be able to take better advantage of the shorter distances between factories and consumers and pass on the savings to consumers. This will be an advantage for both countries over their Asian rivals. Perhaps best of all, the truck program restoration opens the door to ending $2.4 billion in punitive tariffs that Mexico slapped on 99 U.S.-made products in retaliation for the truck shutdown. And it helps Mexico, too. Restoring the truck deal will help Mexican businesses at a time when some see the drug trade as their only opportunity. More U.S. goods there means more choices and more buying by Mexican consumers. So why was the truck program cut in the first place? Democrats did it as a favor to Big Labor. It should never have happened.

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