Tag: Teamsters

An Obamacare Prediction

Based on the White House’s past lawlessness and corruption in the service of Obamacare, I’m willing to venture the following prediction:

The Obama administration will announce in August, probably in a classic Friday news dump, that (1) it will offer Exchange subsidies to workers enrolled in multiemployer union plans, and (2) it will pay the FEHBP contribution toward the Exchange premiums for members of Congress and their staffs.

Here’s what makes this prediction interesting: neither of those things would be legal. So, for the record, I really hope this prediction does not come true.

The last time I made a prediction was this one from December 2012:

HHS maintains they’ll have these [Exchange] things up and running by October 2013. I don’t know anyone who is confident about that and I’m ready to predict that they will not.

That prediction proved true when the Obama administration announced the eligibility verification system for Exchange subsidies would not be ready on time, and took the not-legal step of delaying enforcement of the eligibility rules for a year.

“Let Them [Safety Certified Mexican] Truckers Roll, 10-4”

OK, I took some editorial license on the line from the 1970s song by C.W. McCall about truckers bantering on their CB radios, but the spirit of the song applies to our ongoing dispute with Mexico over access to U.S. highways.

On Friday, the comment period will end in the Federal Register on a pilot program proposed by the Obama administration that would allow qualified Mexican trucks and their Mexican drivers to make long-haul deliveries within the United States. With the exception of a brief interlude from 2007 to 2009, the U.S. has banned Mexican trucks from serving destinations within the United States.

I explain why this is bad for our economy and our reputation as a nation in an op-ed this morning in the Washington Times and in my own comments filed with the Federal Register. As I wrote in the op-ed:

Despite the hundreds of complaints already posted in the Federal Register, the Mexican trucking issue has never been about safety. The proposed pilot program would require Mexican trucks entering the United States to meet all federal regulations on driver qualifications, truck safety, emissions, fuel taxes, immigration and insurance.

Experience from the previous pilot program in 2007-09 demonstrated that Mexican trucks and their drivers are fully capable of complying with all U.S. safety requirements.

An August 2009 report from the Department of Transportation’s Inspector General found that only 1.2 percent of Mexican drivers that were inspected were placed out of service for violations, compared with nearly 7 percent of U.S. drivers who were inspected. In February 2010, the Congressional Research Service reported that recent data provided by the Federal Motor Carrier Safety Administration found that “Mexican trucks are as safe as U.S. trucks and that the drivers are generally safer than U.S. drivers.” What the Teamsters and their congressional allies really object to is that these trucks will be driven by Mexicans.

The Obama administration deserves credit for its effort to end this dispute in the face of pressure from its union base. The sooner we allow more freedom and competition in the cross-border trucking sector, the better.

Mexican Retaliation for U.S. Truck Ban is Proper

The Mexican government announced yesterday that it will expand the list of U.S. products subject to punitive import duties in retaliation for a brazen, 15-year-long refusal of the United States to honor its NAFTA commitment to allow Mexican long-haul trucks to compete in the U.S. market.  Given continued U.S. intransigence on the issue, Mexico’s decision is understandable, if not laudable.

The dispute is not very complicated.  Under the terms of the deal, Mexican trucks were to have been able to compete in U.S. border states by 1995, and throughout the United States by 2000.  But President Clinton, at the behest of the Teamsters union, suspended implementation of the trucking provision on the grounds that Mexican trucks weren’t safe enough for U.S. highways.

By 1998, the Mexicans had had enough, and brought a formal complaint under the NAFTA dispute settlement system, and in 2001, prevailed with a unanimous panel decision that found the United States in violation of the agreement, and ruled that Mexican trucks meeting U.S. safety standards had to be given access to the U.S. market.

In response to the NAFTA decision, Congress stipulated 22 safety requirements that Mexican trucks had to satisfy in order to gain access to the U.S. market.  But before the U.S. Department of Transportation could grant any permits to Mexican truckers, in 2002, environmental and labor groups filed a lawsuit to block implementation on the grounds that the regulations violated U.S. environmental law.

In 2004, the U.S. Supreme Court unanimously struck down the truck ban, and soon after a government pilot program was developed to allow a limited number of Mexican trucks to serve the U.S. market.  But funding for the pilot program was cut off by a Teamsters-friendly Congress in 2008, which effectively put the U.S. market off limits to Mexican trucks once again—and the United States squarely in violation of its NAFTA obligations, again.

In August 2009, after it became apparent that the administration and Congress preferred the economic cost of the trucking ban to the political cost of crossing the Teamsters, the Mexican government tried to change the equation by imposing $2.4 billion in retaliatory duties on about 90 U.S. products.  A Mexican trucking association also filed a $6-billion lawsuit against the U.S. government.

But with no discernible progress toward resolution over the past year, the Mexican government announced yesterday that it will expand the list of U.S. products subject to punitive, retaliatory duties in an effort to convince Congress and the administration to finally live up to America’s word.

The Mexican government is right to retaliate—and to expand the list of products subject to punitive duties.  Of course, retaliation hurts innocents, like U.S. businesses and workers, and Mexican businesses and consumers, who have nothing to do with the central dispute.  And it increases the amount of red tape and the role of governments in international trade.  But retaliation—when authorized by agreement and properly targeted—can also be an effective tool in promoting trade liberalization, reducing red tape, and diminishing the impositions of government.

It is by changing the political calculus that retaliation can be effective.  Thus far, U.S. politicians have found the economic costs of the Mexican trucking ban and the retaliation to be tolerable (for themselves)—at least relative to the expected political costs from doing the right thing by ending the ban.  By expanding the list to include other products, like oranges, the Mexicans hope to impress upon other U.S. interests, like the citrus industry in a very important swing state, that they have dogs in this fight as well.

Between the rising costs on the economic side of the equation and the diminishing political benefits on the other, support among politicians for the truck ban should dissipate.

The Obama administration’s failure to connect the dots is surprising.  Its fealty to the Teamsters directly undermines the lofty goals of its National Export Initiative—which seeks to double U.S. exports in five years.  On trade policy, the administration appears yet to fully grasp that the hip bone’s connected to the thigh bone, the thigh bone’s connected to the knee bone, the knee bone’s connected to the ankle bone, etc.  When you restrict imports (in the immediate case, imports of Mexican trucking services), you restrict exports.

The rising economic and political costs of the truck ban suggest that something’s going to have to give soon.  By amplifying the stakes, the Mexicans are right to hasten that day.