Another Border Issue

Most of you probably don't know that under the late unlamented maladministration trucks not licensed in the U.S. were allowed to operate here over the Mexican border. The Owner-Operator Independent Drivers' Association made a lot of trouble over that, for several reasons, and of course not the least of those was its own business.

The Sierra Club and Public Citizen, along with the Teamsters, raised objections about safety and environmental standards, but were of course driven over by a White House that thought the public interest was interference with its absolute power. However, these were issues that concerned all of us, as Mexico does not require a lot of the safety measures that have developed in the U.S. Another issue was raised here about language ability and training. Last month Congress ended that experiment in unsafety at any speed.

Rescinding that measure, whose legality was always questionable, has created a stir with Mexico that has resulted in their placing tariffs on items like grapes from California. That was a direct slap back at Speaker Nancy Pelosi who was instrumental in ending the measure. Other growers affected by the tariffs have been outspoken in asking to return the commerce at any cost.

The long-simmering dispute over allowing Mexican trucks onto U.S. highways is escalating into a trade war that could cost Washington state agricultural interests millions of dollars in lost sales and present the Obama administration and the Democratic-controlled Congress with an early test of their trade policies.

Washington's pear, cherry, apricot and Christmas tree growers find themselves in the middle of a trade clash not of their own making and facing 20 percent tariffs on their exports to Mexico.

The biggest impact, however, could be on the state's potato growers and processors. Mexico buys $83 million worth of frozen potato products annually, the bulk of them from Washington state, where 10 plants employing 20,000 people produce frozen French fries, hash browns and Tater Tots.

On the other side, organized labor, led by the International Brotherhood of Teamsters, and consumer groups continue to insist Mexican trucks and their drivers present a major road hazard to U.S. motorists. They also charge that Mexico illegally imposed the tariffs without living up to its obligations under the North American Free Trade Agreement.
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The dispute dates to 1995, when the United States refused to allow Mexican trucks across the border as required under NAFTA. The trade agreement, which also includes Canada, allowed for cross-border truck traffic, but U.S. officials said Mexican trucks and their drivers were unsafe.

Rather than allowing Mexican trucks free access to U.S. roads and highways, a pilot program was launched that allowed a limited number of trucks into the United States while safety issues were resolved.

Earlier this month, in approving a $410 billion spending bill, Congress killed the pilot program. Within days, Mexico retaliated by imposing tariffs on nearly 90 U.S.-produced goods worth about $2.4 billion.

The tariffs covered such products as cherries, pears, apricots, frozen potato products, Christmas trees, strawberries, onions, fresh grapes, pet food, books, shampoo, pet food, toothpaste and dishwashers.

Mexican Economic Minister Gerardo Ruiz Mateos said Congress' decision to eliminate the pilot program was "wrong, protectionist and clearly in violation of the treaty."

Teamsters President James Hoffa said Mexican trucks and drivers still don't meet U.S. safety standards and records on Mexican driving violations are often incomplete and inaccurate, records of how many hours Mexican drivers have driven can't be found and there were questions about certified testing facilities to detect alcohol and drugs in drivers.

"Mexico has had 15 years to meet safety standards set by Congress and until they are met, the American public doesn't want these unsafe trucks on our highways," Hoffa said in an e-mail statement.

The NAFTA agreements have never looked like a plus to the U.S. anyway, but safety standards are a real issue in Texas, where most of the traffic would occur. The last eight years gave us a feel for what total lack of public interest spending and regulation would be like. We can do better than let poorly maintained vehicles with overworked drivers loose on our roads.

Another issue raised locally has been the increasing refusal of U.S. drivers to go south of the border because of the mayhem there. Without traffic from the U.S. going south, it is reasonable to assume truck business would increase for the Mexican trucks.

Trade wars may be a burden to growers in other states, but safety should be a big consideration in Transportation Secretary LaHood's agenda. Having driven in traffic that was largely huge trucks to get to various places, I really would want to know that the trucks at least had met basic safety standards. I'll buy the grapes from California myself, thank you.

Free Trade, the Parlor Game

You may have lost your parlor, so my title may not be so funny to you right now. We have a wonderful sounding policy front called Free Trade that has been pushed by a lot of high officials, including, yes, even President Clinton. It sounds like a benefit, acts like a stab in the back.

In Texas, water agreements that have been in place since 1944 have been ignored by our partner, Mexico, during several years of drought. Many farmers north of the Rio Grande who depended on getting their share of the Rio Concho tributaries have lost millions, and some have had to give up agriculture altogether. The farm community has decided to seek justice against a NAFTA ruling against U.S. interests, a denial of water that OUR State Department was seeking.

Let's put that so you are sure to understand, the U.S. State Department sided with Mexico in denial of water to U.S. agriculture interests, water that U.S. farmers had rights to from longstanding agreement.

I'm not against Mexican farmers or industry. I am, however, a U.S. citizen who thinks our government was put in place to protect and defend us, not any other country. In its ongoing record of dysfunction, the U.S. executive branch avoided dealing with such difficult problems as working out fair distribution of scarce water between competing interests. Our government gave advantage, game point, to Mexico.

Stephan Becker, a Washington attorney who has represented Mexico in the dispute, said the Texans' case is fatally flawed; NAFTA doesn't allow parties to air complaints about violations of other treaties, he said.

"Mexico is opposing the judicial review, and we are confident that the request will be rejected," Mr. Becker said.

Three years ago, Mexico agreed to transfer more water to reservoirs to make up for its so-called water debt. But the Texas farmers and water districts insist they should be compensated for the period when not enough water was delivered.

Many farmers struggled through the long drought. Some are believed to have left the Valley. Others couldn't borrow money without being able to show they had water to grow crops.

Last week, Ms. Combs asked Texans in Congress to press the U.S. State Department to stay away from the dispute.

"I think Susan is going to find bipartisan support from the Texas delegation," said U.S. Rep. Henry Cuellar, D-Laredo. "We have to have a system where the Mexicans stop rolling up these big water debts that hurt us in the Rio Grande Valley."

Even lawmakers whose districts have few ties to Mexico said they were distressed to learn about the government's position.
(snip)
"The notion that water rights in Mexico, which are owed to an individual, derive from an international treaty obligation – that is cutting edge," said Mr. Grierson- Weiler, who represented the Canadians in the cattle case. "And I personally think it has a lot of merit."

Mr. Grierson-Weiler said he agrees with Ms. Marzulla that the three-member NAFTA tribunal, which included former U.S. Attorney General Edwin Meese, went beyond its scope when it dismissed the claim, ruling that that Texans didn't have investments in Mexico.

The past year of record rain has avoided huge losses for both sides of our southern border, and the pressures have eased. This is not likely to persist.

The three years preceding 2007 showed 'exceptional' drought levels, like those that Atlanta recently experienced. The water wars between Georgia and Florida were at least familial. Georgia farmers and water utilizers of all varieties were not duking it out with foreign interests, and finding that the same government that relies on them for their funds was using those funds to fight against their interests.

The losses the entire country has suffered from the two terms of anti-American corporate shills is a loss to more than just investors, farmers, home buyers, wage-earners, the general public.

The same people who are incapable of serving the U.S. public are entrenched in offices throughout our departments. As ProfessorWombat often comments at Eschaton, it will take awhile to cull out the idiots who have been given powers they cannot handle, that we are paying them well to misuse against us.

335 days.

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In another example of incompetence, the lack of regulations has led our financial institutions into a disaster that has spread worldwide.

In response to an article at WaPo on how investors are seeking more powers over corporate policy making that has been severely dysfunctional lately, I made these comments:

The basic underlying philosophy of supply side economics has been resoundingly disproved not only by the present meltdown, but also by the unmentioned backdating of stock options. The insistence that deregulation would 'allow' the corporate financial institutions to make huge profits for its investors has proved erroneous.

Directors have been allowed to falsify the records of their stock purchases by giving the wrong date for them, so that low prices could be paid in times of higher prices. This allows the directors to rob the investors.

Loans have been made on bases of 'irrational exuberance', and no curbs of simple basics like an ability to pay off the loan have been allowed, because no regulations were enforced even tho the Federal Reserve had the power to require stricter standards.

Investment turned into gambling, and the directors have awarded executives huge returns for the pay and benefits they received as directors.

Investors need to seize the reins at the board level, and at the voting booth. If regulations cannot be valued on grounds of returning simple honesty, then the present financial crisis should provide reason enough.

Capitalism doesn't work when thieves take control.

at http://www.washingtonpost.com/wp-dyn/content/article/2008/02/18/AR2008021802084.html?hpid=moreheadlines

Globalization is all about Profits for Industry

While listening to the glowing news from the occupied White House about the booming economy that they see from the viewpoint of servicing only the very wealthy, a view of the other world may just be invisible if you're disinclined to accept criticism. In the world generally, the wage losses of the working people is making life ever more difficult. Without disposable income, the green stuff left over after paying for the basics of living, there haven't been great sales during this supershopper, aka Christmas, season.

Living off the land, our neighbors are facing a precipice in Mexico's farming communities. Right, that's the community that was supposed to be saved by NAFTA creating all those great industries to employ them. Look very hard. Those industries have not materialised, while prices have not proved enough of a boost for the tiny farmsites that prevail in nearby Mexico.

For 15 years, Mexican farmers have feared the day when the last import protections end for the country's ancestral crops of corn and beans.

But as Jan. 1 draws near, farmers say the damage has already been done: Mexico has plunged deeply into a model of globalized agriculture where farmers are ill-prepared to compete, and even people who don't farm for a living are suffering.
(snip)
"It isn't enough to live on, and besides, we have to plant with mules and a hand plow, because there have not been any programs to provide us a tractor," Lopez said.

It wasn't supposed to be this way. Officials in 1993 said the 15-year transition period would give farmers here a chance to modernize, diversify their crops and begin to export them, or at least find seasonal work at a new wave of factories the trade pact was expected to bring to the Mexican countryside.

None of that happened, says Victor Suarez, the leader of a farm cooperative group that works to start storage silos and direct farm-to-consumer sales of corn tortillas.

"There was no transition period like they promised 15 years ago," Suarez said. "We are not ready (for the trade opening), the only ones who are ready are the 20 big agribusiness corporations."

In fact, Mexico's government has already allowed global market forces to be strongly felt in Mexico. For years, it has allowed more corn imports under lower tariffs than NAFTA requires. This is why the U.S. ethanol boom caused a spike in tortilla prices early this year, which in turn sparked street protests in Mexico.

For a country long used to a highly regulated agricultural market, the "tortilla crisis" was a bitter taste of the power of agribusiness consortiums that allegedly hoarded corn and speculated with prices.

The globalization of our economy has meant a drain of high-tech jobs as well as most of our former manufacturing sector. It has been a cheat as well to other countries' workers, and has revealed itself to be only a ruse to convince our leaders, and voters, that letting businesses set up internationally is going to make them act responsibly toward their workforce. This has proved not to be the case.

It's become increasingly obvious that our corporate representatives are determined to betray their workers, and ignore the need to insure they can afford what they produce. We won't be sorry when they find the profits aren't coming in from a third world world.

Increasingly, finding out they have been cheated is turning Latin America away from the U.S., where their interests have been betrayed.

Technology Myth

Funny thing, the other day I picked up a book last published in 1983,(I can't find it now, but it took off from Alan Toffler's Future Shock), and I was amused that the author confidently announced that the American technological business community would mean huge dominance throughout the world, employment of American workers everywhere, a world characterized by that dominance. There seemed no concept that conversely, the attention in other countries to education, development of high capacity for technological business, and social conscience, instead of corporate greed, in other countries would take those jobs out of this country, and our business community would come to be dominated by other countries that put their resources into training and education, and development, of their workforces/citizens.

Today WaPo announced that outmoded myth as truth yet again.

Nor did NAFTA cost the United States any jobs, on net, though it might have created a couple of hundred thousand. The agreement contributed marginally to the shifting of workers from some less competitive sectors to others. As for wages, a gap between higher- and lower-paid workers has indeed developed in the NAFTA years, but the main culprit is technology, which increases demand for highly educated and trained workers.

That its time to wake up and smell the declining dollar, or at least listen to that sucking sound Ross Perot anticipated would not occur to a strong advocate of NAFTA, would it?

This country needs to stop throwing its treasure into no-bid contracts with executives' friends and start salvaging its educational system along with all the other neglected areas our government is cutting out so we can have a very rich privileged set.

The Price of Tortillas

Tortillas, a Mexican staple, are costing more these days, and those who can least afford such an increase are hitting the streets to protest the price hikes. The reason for the price hikes? Let's just say NAFTA turned out to be a mistake for the poor and the laborers of both countries. From Mexico's La Jornada:

The crisis we are experiencing in regard to the rise of tortilla prices that so gravely affects the Mexican population, but more seriously affects the 20 million people who are already food-poor, is yet another manifestation of the asymmetrical and wrong-headed trade relationship between Mexico and the United States. Since the signing of the Free Trade Agreement (NAFTA) in 1994, a great many voices have called attention to the problems that could arise. These include that the Treaty would neither achieve a reduction in migration (the central argument of Salinas de Gotari ) nor would it permit us to overcome our subordinate position in relation to the United States, since in economic terms, Mexico was not on an equal footing with its neighbor. Lamentably, time has proven these voices to be right. For their part, the U.S. visualized quite clearly that a form of domination could be achieved over other countries by achieving crop-growing supremacy. And Mexico entered that game losing food self-sufficiency, with all the grave effects that this has brought.

The irony of the NAFTA results is that Mexico finds itself in a much worse situation than it held prior to signing the free trade agreement.

For the United States to achieve this practically hegemonic position has required foreign workers, and to transform them into a reserve industrial army in their home countries by making it possible for them to migrate [north], which has devastating effects on Mexican farming. The great irony of all this is that we now import food products and export our work force, which favors U.S. competitiveness and leaves us at the mercy of the ups and downs of their economy. [Emphasis added]

It isn't, however, just Mexican laborers who have lost ground. The American labor force has also suffered under the various free trade agreements as their jobs have either been turned over to laborers residing in Asia or to laborers who are brought in from Mexico and Central America. The only ones making out under NAFTA are the mega corporations whose tentacles reach to all parts of the world.

And the result is that the poor in Mexico are hard pressed to buy their tortillas.