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Economic Forecasts

Time for Obama to Stand Up to the Teamsters

So it turns out the biggest problem with the $410 billion omnibus spending bill wasn't earmarks, after all.

So it turns out the biggest problem with the $410 billion omnibus spending bill wasn't earmarks, after all. It was a little noticed provision stuck in by Democrats to violate a treaty and start a trade war with Mexico. And all to make the Teamsters happy.

Woe be it for me to put more on President Obama's crowded plate, but he really missed the boat on this one and now he needs to fix it. Obama allowed congressional Democrats to use the omnibus spending bill to end a pilot program that let a limited number of  Mexican truckers who make deliveries in the U.S. pick up a load on the way back. The U.S. agreed to an open border for trucking as part of NAFTA, but with the Teamsters Union doing everything it could to block it, Congress would only go along with a modest pilot program. The spurious excuse was that Mexican trucks were unsafe.

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Now even the pilot program is gone and Mexico is retaliating by slapping tariffs on a host of U.S. goods, including grapes (45%) cherries (20%) potatoes (20%) and toothpaste (15%). Together the goods effected accounted for $2.4 billion in exports to Mexico in 2007. A trade war with one of our biggest trading partners is the last thing we need in this troubled economy, to say nothing of the fact that this is a very clear violation of our treaty obligation. Obama, who has repeatedly expressed his support for free trade, needs to put an end to it promptly.

This is a bigger test of the president than it might seem to be. It will mean not only saying no to the unions -- a core Democratic constituency -- but also insisting that Democratic leaders in Congress, who are even more beholden to the unions, reverse themselves. Let's hope he can get it done in time to avert a real calamity.

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