The Economy Secretary of Mexico Gerardo Ruiz Mateos stated they would impose higher tariffs on 90 items from the US in retaliation to the last week’s truck ban. The hike in tariffs and the list of goods are likely to be released later this week.
However, the quick response from the Obama administration indicates that they are in no mood to strain the relationship with its neighbour. It was very evident in the words of Robert Gibbs, the White House press secretary while he said they did not want to create any barrier to the trade relations with Mexico especially in a time of economic crisis.
A week ago, Obama annulled the pilot programme that allowed the movement of some Mexican long-haul rigs or trucks through the US roads. Under NAFTA, in force since 1994, the Mexican trucks should be permitted to ply up to the north of the border as early as January 2000. But the Mexican vehicles are widely blamed for not complying with the safety standards of the US and also eating into the US truckers’ jobs.
Subsequently, Mateos rebutted the argument by stating that the Mexican trucks never violated safety norms despite there were about 46000 crossings during the 18 month old pilot programme as no noticeable accidents were being reported. Nonetheless, he further added that Mexico was open to talks and expressed confidence in resolving the issue soon.
It has been learned that Obama has instructed his officials concerned to have talks with Mexican officials to arrive at a solution as early as possible. The new tariff is likely to affect $2.4bn worth of American agricultural and industrial products from 40 states.
Nevertheless, the re-permission to the Mexican trucks are likely invite the ire of labour unions who gave support to Obama in the 2008 presidential election on a promise that NAFTA will be re-negotiated and modified to preserve the US jobs. The US is estimated to have spent $500mn for the pilot programme since its inception.