TPT November 2010

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Global Marketplace
minister of Belgium, which holds the Union’s rotating presidency. He
said that the agreement would take effect 1 July 2011.
Such pacts require the approval of all 27 EU member states. The
delay in implementation had been sought by Italy, which thereupon
withdrew the last remaining objection to ratification. The Italian
hesitancy was attributed to concern for the domestic automobile
industry. “This the first generation of bilateral trade agreements
which will bind Europe and Asia together in an ever-closer economic
bond,” said Mr Vanackere. “This is a very big step in opening
markets in Asia for our companies.”
Nearly all tariffs between the two economies are to be removed,
together with many nontariff barriers. The European Commission
estimates that the pact will be worth as much as $25 billion in new
trade for EU exporters, and will “boost jobs and growth.” Trade
between the Union and South Korea totalled about $69 billion in
2009.
In Seoul, the Ministry of Foreign Affairs and Trade, citing the
comparatively high tariffs imposed by the EU, said the deal would
likely deliver greater benefits to South Korea than a prospective
free-trade agreement with the United States. Ratification of that
pact, which is strongly supported by President Barack Obama, has
hung fire for more than three years.
The South Korea-US accord is strongly opposed by the American
automotive and related industries, as well as by labour unions,
on grounds of alleged unfair restrictions on US car sales in South
Korea. According to the New York Times (16 September), the
Associated Press quoted the South Korean trade minister, Kim
Jong-hoon, to the effect that by its failure to act the US stands to
lose several hundred thousand jobs when Seoul’s agreement with
the EU takes effect.
A 15-year stalemate persists as Mexico
and the US both stand firm on long-haul
trucking across the border
“Behind the talk, insiders see little prospect of progress in ending the
dispute that has claimed an estimated 25,600 jobs in the US, cost
an estimated $2.6 billion in lost exports, and jacked up import costs
to American consumers by an estimated $2.2 billion.”
The dispute cited by Stewart M Powell of the Houston (Texas)
Chronicle’s Washington bureau is the 15-year stalemate between
the US and neighbouring Mexico over cross-border trucking;
specifically, over a US ban on long-haul Mexican trucks that do
not meet American safety standards. Those doing the talking are
US lawmakers and members of the Obama administration, who
must harmonise their own differences before action can be taken
in the matter. (“Trucking Dispute Rumbles Toward a Dead End,” 21
August)
An agreement requiring Mexico to raise truck standards would
presumably allay congressional concerns about highway safety.
This would pave the way for the US to open its southern border to
Mexican trucking, as required since 1995 under the terms of the
North American Free Trade Agreement. But competing political
pressures prolong the standoff that prevents Mexican trucks from
delivering Mexican products beyond the 25-mile-wide NAFTA
trading zone at the border.
As noted by Mr Powell, American labour unions – notably the
1.4-million-member International Brotherhood of Teamsters,
whose Freight Div. represents truck drivers – oppose any deal.
Conservatives in Congress, responsive to the highway safety
concerns voiced by the unions, have also raised the prospect of
terrorists entering the US aboard Mexican trucks. A subtext of the
controversy is the national debate on illegal immigration, which has
galvanised hard-liners in advance of the midterm congressional
elections in November.
For its part, Mexico sees the issue in stark restraint-of-trade terms.
In a 16 August statement, the Mexican Embassy in Washington,
DC, said, “Mexico has yet to receive a formal proposal for resolution
of this dispute and an unequivocal signal that the US government
is working to eliminate the barriers that Mexican long-haul carriers
face to access the US market.”
Mr Powell of the Chronicle noted that, without a deal between the
White House and Congress, a trade war continues to escalate.
He wrote: “Mexican authorities have ordered at least $2.5 billion
in punitive duties on 99 categories of US products – up from $2.4
billion in retaliatory duties imposed on 89 categories of products [in
2009].”
› A curiosity of the dispute, noted by Mr Powell, is the excellent
safety record compiled by Mexican trucks during a recent
18-month pilot programme administered by the US Federal Motor
Carrier Safety Administration. The programme, which permitted 100
long-haul Mexican trucking companies to operate inside the United
States, found that their vehicles crossed the border 46,000 times
without major incident. While the limited number of Mexican trucks
in the study undercut the results, the agency noted that long-haul
American truck drivers and US trucks were out of action more than
Mexican truckers and trucks.
But the Washington-based Teamsters give no indication of easing
their pressure on Congress.
“To turn those unsafe trucks loose would be catastrophic,” James
P Hoffa, the union’s president, told Mr Powell. “There’s no way this
will ever be a two-way street. Can you imagine a teamster driving a
load of Cadillacs down to Mexico? How far do you think he’s going
to get?”
Business
Denmark and Canada are found to hold
greater attraction for entrepreneurs than
the United States
“The global perception of [the US] as a land of opportunity and as
the mecca for individuals wanting to do something new and different
seems to be somewhat challenged by the facts.”
This is the conclusion drawn by Zoltan Acs of George Mason
University School of Public Policy (Fairfax, Virginia) and Laslo Szerb
of Hungary’s University of Pécs, in Global Entrepreneurship and
the United States. Released 9 September, the paper undertakes
to “capture the contextual feature of entrepreneurship” across
71 nations. The US was found to lack high-growth business and
cultural support for entrepreneurship and to be frail in the technology