By Mark Drajem
Aug. 7 (Bloomberg) -- U.S. exporters want President Barack Obama to bring a souvenir home from his meeting with North American leaders in Guadalajara next week: an agreement to put Mexican trucks back on U.S. roads.
Makers of paper, batteries, toothpaste and grapes are paying tariffs on $2.4 billion of exports to Mexico after that country retaliated for a U.S. ban on Mexican trucks. Transportation Secretary Ray LaHood’s comment on Aug. 4 that he’s too busy with the “cash for clunkers” auto-discount program to focus on the truck dispute hasn’t helped matters, exporters say.
“On the U.S. side, there is a lack of political desire to solve this,” said Ken Barbic, director of federal affairs at Western Growers of Irvine, California, which represents grape, lettuce, date and pear growers hurt by the tariffs.
Congress in March ended a pilot program that let Mexican trucks deliver goods in the U.S., after lawmakers such as Senator Byron Dorgan, a North Dakota Democrat, said the vehicles posed a safety hazard. Mexico responded with the tariffs.
The issue will be on the agenda when Obama meets with Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper at the North American Leaders Summit on Aug. 9 and 10, officials said at a White House briefing yesterday.
‘Hurting Bottom Line’
“We would like to see a greater sense of urgency” from the Obama administration to resolve the trucking issue, said Steve Mulder, a lobbyist at Venn Strategies in Washington who represents the Alliance to Keep U.S. Jobs, a group of companies formed to fight the tariffs.
Appleton Papers Inc. of Appleton, Wisconsin, and Mary Kay Inc., the Dallas-based cosmetics seller, as well as growers of grapes and pears say the tariffs have damaged or cut off one of their biggest export markets.
Mary Kay is paying $450,000 a month in added tariffs and taxes to get its lipstick, blush and skin products into Mexico, said Anne Crews, vice president of government relations for the privately held company. “We have not passed the cost on,” she said. “It’s hurting Mary Kay’s bottom line.”
Mexico imposed a 10 percent duty on Appleton’s carbonless paper, said Kent Willetts, vice president of marketing and strategy. The country is a $50 million market for the paper, he said.
“We’ve maintained our exports at the expense of little or no profit,” Willetts said. “The question is: How long can it go on?”
Caterpillar to Microsoft
Privately owned Appleton is a member of the Alliance to Keep U.S. Jobs with such companies as Caterpillar Inc.,Smithfield Foods Inc. and PepsiCo Inc. Those publicly traded companies also want to stop the tariffs. Their products haven’t been hit by them so far.
The group persuaded a Senate committee to include language in pending legislation urging Obama to “work expeditiously” to establish a new border-crossing plan.
“It’s the principle that is most important for our industry,” said Gary Shapiro, president of the Consumer Electronics Association, which represents Amazon.com Inc.,Intel Corp.,Microsoft Corp. and other technology companies. “Mexican trucks are where the free-trade battle is being fought this week.”
As part of the North American Free Trade Agreement, the U.S. agreed to allow Mexican trucks free rein on U.S. roads, a pledge it has never fully honored because safety advocates and union officials say Mexico’s trucks and drivers don’t meet U.S. standards.
Teamsters Against Trucks
Lawmakers such as Representative Brad Sherman, a California Democrat, are urging Obama to contest the tariffs instead of compromising with Mexico and allowing the trucks to return.
The International Brotherhood of Teamsters union, whose members include U.S. truck drivers, also opposes restarting the Mexican truck deliveries, Teamsters General President James Hoffa said in an e-mailed statement.
“Until there is a guarantee that these trucks are safe, Mexican trucks should not be allowed to drive freely on our highways,” Hoffa said.
In 2008, the U.S. and Mexico had $368 billion in trade, making Mexico the third-largest U.S. trading partner after Canada and China, according to the Commerce Department.
Safety proponents, Teamsters and the American Trucking Association met with LaHood in April to discuss how the pilot program could be changed and restarted, said Clayton Boyce, a spokesman for the Arlington, Virginia-based trucking association, which supports allowing Mexican trucks in the U.S.
‘Still Waiting’
“We’re still waiting for the administration,” Boyce said.
LaHood said at the National Press Club in May that he had met with as many as 30 lawmakers as he sought help in drafting a plan to allow some Mexican trucks into the U.S. He said the issue would be resolved by the “early part of the summer”
On Aug. 4, LaHood said he has been focusing on getting Congress to provide more funds for the auto-discount plan.
“We’re spending all our time working on the additional $2 billion” for the clunkers program, LaHood said. “We’ll come back in the fall and see where we are.”
To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net
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