Lone Star Times – Trade Wars Are Stupid and Destructive

There are many good articles out there this morning decrying the Teamsters and others for getting us into this mess we’re in today, but I am going to liberally quote this excellent report from the Lone Star Times

LST leads off with one of Jim Hoffa’s oft repeated lies about the program.

The International Brotherhood of Teamsters hailed the end of the road for the trucking program, and issued a sharp rebuke of Mexico’s retaliatory action Monday. “The right response from Mexico would be to make sure its drivers and trucks are safe enough to use our highways without endangering our drivers,” Teamsters President James Hoffa said.

followed by a quote from Hoffa’s Congressional puppet who at first glance would appear to have had a change of heart or grown a pair to go against his master.

A long-time critic of the program, Sen. Byron Dorgan (D., N.D.) said he would work with the Obama administration to address the safety concerns. “I have said all along that I have no problem with Mexican long-haul trucks being allowed into the United States if it can be done safely,” he said.

Faithfully adhering to the script written two decades ago, Democrats, Teamsters and anti-free traders all continue to display their allegiance to a tired and decrepit ideology conservatives and libertarians have fought for generations to bury. The spectacular success of global trade over the last twenty plus years has raised the standard of living for people around the world and brought a level of wealth to America earlier generations would find astonishing.

After formal negotiations begun in 1990, a majority vote of Republicans in Congress saw passage of the North American Free Trade Agreement in 1993, creating the second largest free trade bloc in the world measured by combined GDP. The treaty was born under a Republican regime and eventually ratified and signed into law by a Democratic president. The hard economic realities are irrefutable concerning the benefits of NAFTA to the three member nations.

The Obama administration has angered the Mexican government by violating a provision of a treaty we agreed to and ratified nearly sixteen years ago. There are many issues on which the Mexican government can be justifiably criticized, but not this one. America has spent all these years breaking one promise after another in violating compliance with one of the most important treaties ever signed by this nation.

Trade wars have very often resembled barroom brawls beginning with one man punching another who then hits a bystander who then slugs an onlooker without warning. They have a way of spiraling quickly out of control and culminate in everyone in the room suffering terribly.

It is time now for America to live up to her obligations, cease coddling industries and unions while stoking protectionist fears around the world by displaying our fecklessness. The current precarious state of global markets does not need the lack of confidence and fear of retaliation generated by the USA arbitrarily breaking its word. This country, our neighbors and allies across the globe need now, more than ever, strong and steady leadership and that begins first with keeping our word.

Democratic critics have questioned whether Mexican authorities maintained adequate safety records on drivers, as well as whether Mexican drivers spoke English and were adequately tested for drugs and alcohol. – Wall Street Journal

The DOT OIG Final Report signed off on the pseudo concerns of the critics.

The carriers involved in the program have had their entire operations scrutinized by FMCSA as part of the PASA process. And the report stated that Mexico has made significant gains in it’s drug testing program, which coincidentally, is tied into the issuance of the Licensia Federal, something only now being discussed in Washington for American drivers. And the tests are given by government facilities by government doctors and lab techs. This is something that Hoffa and others try to get you to ignore.

The Wall Street Journal further expose the outrageous lies of Hoffa and others.

When G-20 finance ministers met in England over the weekend to discuss a way out of the global financial crisis, the group pledged to eschew trade protectionism.

That sounds good. But some of the governments represented at the meeting aren’t walking the walk on global commerce at home. Instead they’re taking the side of special interests that want to weaken foreign competition. One culprit that comes to mind is the U.S.

In violation of the North American Free Trade Agreement, the U.S. last week again closed its southern border to any Mexican trucks additional to those with existing permits. It did so on the usual grounds that Mexican trucks are unsafe, even though that hoary claim has been demolished by extensive testing. But Congress and President Barack Obama are catering to the Teamsters union, which has spent more than a decade lobbying to keep Mexican competition off U.S. highways.

Candidate Obama ran for president as a protectionist, with a special emphasis on a promise to block ratification of U.S. free trade agreements with South Korea and Colombia. Big Labor was a big giver to Mr. Obama’s campaign and he owes it big time. Last week he began paying up. During confirmation hearings, his nominee to be U.S. Trade Representative, Ron Kirk, sharply criticized both agreements.

Yet if Mr. Obama and congressional Democrats were not expected to champion freer trade, some hoped they would not reverse liberalization gains of recent years. The decision on Mexican trucks last week shows they are doing just that.

Everyone whines about border security….

There would also be security gains if trucks carried cargo in both directions. As it stands now, once cargo is off-loaded in the border zone, the vehicle returns home empty. This creates many opportunities for smuggling drugs, weapons and cash.

And about the safety record, new and old!

Mexican trucking in the U.S. is not new. More than 800 Mexican carriers — all of which are majority owned by Americans — have permits that were grandfathered more than 20 years ago. And their safety record is enviable. A 2007 DOT study of the performance of Mexican carriers in the U.S. from 2003-2006 found Mexican trucks to be safer than U.S. trucks. Even Mexican short-haul trucks operating in the border zone had a better record than U.S. trucks.

And surprise, surprise!!!

he 27 Mexican carriers in the pilot program compiled an impressive safety record in 2008, judging by the rate at which randomly stopped vehicles received an “out-of-service” designation — meaning they did not comply with all safety regulations — from DOT inspectors. Whereas all U.S. carriers had a vehicle “out-of-service” rate of 21.6%, all Mexican carriers had a rate of 20.7% and Mexican carriers in the pilot program had a rate of 7.3%.

So how have Congress and President Obama responded to this success? They killed the program by prohibiting its funding in the new $410 billion omnibus spending bill. This ends new Mexican competition in trucking.

Mexico says it will retaliate, and if it’s smart it will hit U.S. producers in strategic markets. This will be bad for Mexican consumers, but if constituents of protectionist U.S. senators feel the pain, it might succeed in changing attitudes in Congress. Given the political muscle of the Teamsters, there aren’t many other options.

So the question is. Who do you believe? The oversight arm of Congress in the guise of the Office of Inspector General? Do you believe proven statistics gleaned from roadside inspection reports? Or do you believe the rantings of one little thug with a hard on for Mexico since his union is not allowed to organize there?

Can you imagine how quickly he would be singing a different tune if Mexican law allowed him to organize in Mexico?