Flat Tires at the Border AS/COA Online 03/27/08

Trucks at the U.S.-Mexico border in San Diego. (AP Images)

Even as U.S. Democratic presidential candidates on the campaign trail reopen debate about the North American Free Trade Agreement (NAFTA), debate between U.S. officials calls into question the future of a U.S.-Mexican cross-border trucking program. Six months into a one-year trial, detractors in U.S. Congress seek to dismantle the program. However, the U.S. Department of Transportation found that—halfway through the pilot—the program met all 22 safety mandates set out by Congress.

Nearly a decade and a half ago, the North American Free Trade Agreement (NAFTA) required the United States to open its borders and all of its states to Mexican trucks by 2000. But protests by union leaders and safety groups raised concerns about a lack of oversight in terms of cargo inspections and background checks of Mexican truckers, hindering implementation of the trucking agreement. Initiated in September 2007, the pilot project sought to provide an entry point to meet provisions. In December 2007, Congress ended funding for and prohibited establishing cross-border trucking programs. The Transportation Department continued the pilot, arguing the programs were established prior to the December law and igniting a debate, not only with the Senate, but also with the Teamsters and environmental groups.

But while critics complain of concerns that the project does not provide enough oversight in terms of Mexican truckers on U.S. roads, reports by the Transportation Department find that U.S. truckers have benefited more from the program than their Mexican counterparts. At the six-month mark, only 18 out of 100 Mexican trucking companies expected to sign up had participated. Furthermore, U.S. carriers made nearly 700 cross-border trips as part of the project—more than double the trips made by Mexican truckers. “We should be looking for every opportunity to open new markets for our drivers,” said Transportation Secretary Mary E. Peters, speaking March 25 at a Colorado meatpacking plant.

Mexico serves as the United States’ third largest trading partner behind Canada and China. According to the U.S. Census Bureau, the 2007 U.S.-Mexico trade totaled for more than $347 billions, with commercial trucks moving about 70 percent of all goods. The Transportation Department estimates that the current system, which requires the transfering of most goods from the truck of one country to the other, costs U.S. consumers $400 million per year. A letter sent to Congress by 69 business organizations supports the cross-border program, stressing the importance of U.S.-Mexico trade in several sectors raging from electronics, textiles, food, and perishable goods.

A recent Iowa State University study calculated that more than 40,000 jobs in 17 U.S. states might be in peril if Mexico retaliates against the U.S. non-compliance of NAFTA. A recent San Diego Union-Tribune editorial criticizes attacks against the pilot project, saying critics have “resorted to xenophobia.”

In an op-ed for the Calgary Times, AS/COA President and CEO Susan Segal categorized NAFTA as “the most effective tool we have to increase trade among the U.S., Canada, and Mexico.” Washington Post columnist Marcela Sanchez recommends that, rather than tinkering with NAFTA, the government should focus on promoting corporate social responsibility in Latin America.

Read the article as originally published at the AS/COA website.

Download a PDF file here.

Latin American Links in Spain’s Election AS/COA Online 03/07/08

Spain’s presidential candidates. (AP Images)

Global media attention for the drawn-out White House race eclipsed news of the election cycle in Spain, where the struggle to win the March 9 election was also highly contentious. Two days before the ruling party Socialist Workers’ Party gained victory, campaigning was cut short due to the murder of a former politician from the ruling Spanish. The crime was blamed on Basque separatist group Eta and raised the specter of the Madrid train bombing that occurred days before the 2004 presidential election. Prior to the assassination, opposition leader Mariano Rajoy of the conservative Popular Party (PP) attempted to chip into Prime Minister Jose Luis Rodriguez Zapatero’s lead in the polls by attacking his rival on issues including immigration and the country’s flagging economy.

After more than a decade on the rise, some forecasters predict that Spain’s economic growth could fall below 2 percent this year. Job losses hit 53,000 in February and the number of people unemployed over the past year increasing by nearly a quarter of a million. Despite evidence that immigration helped fuel Spain’s economic growth, Rajoy proposed obliging immigrants to sign an “integration contract” that would, amongst other requirements, compel immigrants to return to their home countries if they cannot secure work within a specific period of time. Zapatero’s government, in turn, announced intentions to apportion $29.6 million for social programs to foster immigrant integration in 2008.

Although tough policy talk is thought to be directed at African immigrants, restrictions on immigration would also affect Latin Americans living in the country, who make up one third of Spain’s immigrant population. In 2006, the number of Latin American immigrants living legally in Spain reached almost 1.1 million. Most are South American, with roughly 380,000 Ecuadorians and 225,000 Colombians constituting the two largest Latin American immigrant populations, followed by Peruvians and Argentines. Latin Americans in Spain send roughly 15 percent of their annual income to families in sending countries; remittances to Latin America reached more than $5 million in the year leading up to June 2007, according to the Inter-American Development Bank.

Despite Spain’s domestic economic slowdown, the country’s multinational corporations have benefited from Latin American investments, even as certain South American countries moved toward nationalizations that affected Spanish holdings. In 2007, Zapatero engaged directly Ecuador’s President Rafael Correa to renegotiate contract terms for Repsol’s holdings in Ecuador. Repsol YPF recently announced a record net income of $4,899 million for 2007, with the bulk of its ventures in Latin America and the Caribbean. The country holds a 25 percent stake in Brazil’s recently discovered Tupi oil field, a 28 percent holding in the Genghis Khan oil field in the Gulf of Mexico, and hefty ventures in Colombian fields. Another Spanish giant, Telefónica of Spain, also posted (PDF) 43 percent in net profit for 2007 with 218 million customers worldwide—more than half of whom reside in Latin America.

Although winner Zapatero has had warmer ties with left-leaning Latin American leaders than his predecessor from the PP, the relationship has not been without its bumps. Madrid roiled Washington when Zapatero’s government participated in a major arms deal with Caracas in 2005. However, in November 2007, Zapatero and Venezuelan President Hugo Chávez engaged in verbal sparring during the Ibero-American Summit.

Read the article as originally published at the AS/COA website.

Download a PDF file here.