Obama's Mexican Payoff

Fresh on the heels of his appearance at the G-20, Barack Obama next week ventures to Trinidad and Tobago for the Summit of the Americas. Prior to that he’ll stop in Mexico to try to improve damaged relations with that country. As I’ve written elsewhere, Obama triggered a low-level trade war when he kowtowed to the Teamsters and canceled the program that formerly allowed some Mexican commercial trucks to operate in the U.S. This put the U.S. in unilateral violation of NAFTA, and Mexico retaliated by raising tariffs on 90 products imported from the U.S. Mexican sourced have also made clear that more tariffs are likely if this dispute is not quickly resolved.

Obama deputized Ray LaHood to solve the problem – and bring the U.S. back into compliance with NAFTA – by creating a new trucking program. Last Friday however, Nancy Pelosi told Obama to go pound sand:

House Speaker Nancy Pelosi cast doubt Friday on the possibility that Congress would revive a program that allows Mexican truckers to operate in the U.S…

“I don’t see a change coming,” Pelosi said Friday in a roundtable discussion with regional reporters. “The president may have some other views, and we’ll see what he has to say about it. But I don’t see any change.”

The White House has tried to end the trade dispute by assigning Transportation Secretary Ray LaHood to design a program that meets North American Free Trade Agreement regulations but is palatable to lawmakers.

U.S. Trade Representative Ron Kirk said Friday that the administration has assured Mexico it will try to resolve the dispute “sooner rather than later.” But Kirk wasn’t sure there was a way to persuade Mexico to drop the tariffs, short of Congress lifting the restrictions.

The Teamsters union and the Owner-Operator Independent Drivers Association told LaHood this week that they remain opposed to Mexican trucks transporting goods on U.S. highways, citing concerns about safety and a lack of regulation in Mexico.

With trucking apparently off the table, what can Obama offer Mexico to ensure friendly headlines next week? How about moving ahead on immigration reform – another top priority of President Calderon:

While acknowledging that the recession makes the political battle more difficult, President Obama plans to begin addressing the country’s immigration system this year, including looking for a path for illegal immigrants to become legal, a senior administration official said on Wednesday.

Mr. Obama will frame the new effort — likely to rouse passions on all sides of the highly divisive issue — as “policy reform that controls immigration and makes it an orderly system,” said the official, Cecilia Muñoz, deputy assistant to the president and director of intergovernmental affairs in the White House.

Mr. Obama plans to speak publicly about the issue in May, administration officials said, and over the summer he will convene working groups, including lawmakers from both parties and a range of immigration groups, to begin discussing possible legislation for as early as this fall.

If this is not intended to win points in Mexico (and perhaps elsewhere in Latin America) why else make such an announcement now? Obama has promised to push for an amnesty several times in recent weeks. Why specify a timetable for action? Why announce today that Obama will speak about this next month; why not just let him speak about it next month – without several weeks warning? How many other presidential initiatives have come complete with one month advance notice and a timetable for action?

It seems clear that Obama is giving Calderon and Mexico a commitment and a timetable to ensure accountability. Now we’ll see the reaction in Mexico City.

And to think: this all could have been avoided if Obama had simply abided by our international commitments, rather than kowtow to the Unions.