By Chang-Ran Kim
November 11, 2010
YOKOHAMA, Japan, Nov 11 (Reuters) – Mexico will slap retaliatory tariffs on a new set of U.S. goods unless Washington moves to resolve a decade-old trucking dispute and the “clock is ticking” for action, Mexico’s economy minister told Reuters.
President Felipe Calderon’s government put tariffs on U.S. pork products and other goods in August, aiming to hit exports from as many states as possible to pressure its main trading partner to allow Mexican trucks full access to U.S. highways.
Under the North American Free Trade Agreement (NAFTA), which took effect in 1994, the United States agreed to allow Mexican truckers to transport goods in the country but Mexico says Washington has not lived up to its end of the deal.
Mexican Economy Minister Bruno Ferrari said U.S. President Barack Obama’s administration, while sidetracked by the recent mid-term elections, had been slow to deliver a promised new proposal to resolve the issue.
“I haven’t seen any specific plan on my desk,” Ferrari said on Thursday in an interview in the Japanese port city of Yokohama, where he was attending a ministerial meeting of the Asia-Pacific Economic Cooperation (APEC).
He said Mexico was prepared to move on its warning of periodically shuffling the U.S. goods it hits with tariffs.
“The clock is ticking, so we are making all the analysis,” he said.
Washington had resisted implementing the agreement under NAFTA for a decade, citing safety concerns.
NEWS OF VIOLENCE OVERBLOWN?
Violent crime has swept through Mexico as the government takes on powerful drug cartels, and the wave of violence has been particularly acute in the industrial north, where thousands of foreign-owned factories dot the border with the United States.
While Ferrari acknowledged that violence was a problem, he said he was in close contact with foreign companies, especially in the most turbulent cities, and that none had expressed an intention to leave.
“At the end, the bottom line is you see the figures and you realise that Mexico is a very important place to be,” he said, noting its robust economic growth, competitive manufacturing costs and its 44 free trade agreements (FTAs).
Carlos Pascual, the U.S. envoy to Mexico, told Reuters last week that Mexico’s drug war could force more companies to scale back investment in the country. A survey of 220 U.S. companies by the State Department showed last month that 15 percent of the companies had postponed investments or expansion plans in Mexico due to the drug wars. [ID:nN04184915]
But Ferrari played down the survey, saying the perception of violence in Mexico may be overblown citing vested interests from competing forces.
“We compete with the U.S. for investments,” he said. “When you have these bad news, especially at the border, many people consider it good news to say, ‘Don’t go to Mexico because in Mexico you have problems, and you can be killed.’
“I’m not neglecting that we have a problem, but the important thing is that we are correcting the problem,” he said, adding that foreign companies saw the government’s war on crime as positive and “guaranteeing their long-term investments”.
More than 31,000 people have been killed across Mexico since December 2006, when President Calderon took office and launched his army-led crackdown against drug cartels.
Despite the violence, foreign companies are pouring billions of dollars of fresh investment into Mexico as the country rebounds from its deepest recession in decades. Foreign direct investment climbed 28 percent in the first six months of 2010 from a year earlier. [ID:nN23129119]