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<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><font
size=2 color=navy face=Arial><span lang=EN style='font-size:11.0pt;font-family:
Arial;color:navy'><img width=199 height=31 id="_x0000_i1064"
src="cid:image001.gif@01CAC03E.64DB27F0" alt="The Wall Street Journal"><o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><font
size=2 color="#666666" face=Arial><span lang=EN style='font-size:11.0pt;
font-family:Arial;color:#666666'>MARCH 10, 2010</span></font><font size=2
color=black face=Arial><span lang=EN style='font-size:11.0pt;font-family:Arial;
color:black'> <o:p></o:p></span></font></p>
<h1><!-- ID: SB10001424052748704784904575112032142899068 --><!-- TYPE: Politics and Policy --><!-- DISPLAY-NAME: --><!-- PUBLICATION: The Wall Street Journal Interactive Edition --><!-- DATE: 2010-03-10 00:01 --><!-- COPYRIGHT: Dow Jones & Company, Inc. --><!-- ORIGINAL-ID: --><!-- article start --><!--
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CODE=DJII-SUBJECT SYMBOL=gtrade
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CODE=DJII-REGION SYMBOL=mex
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--><st1:place w:st="on"><st1:country-region w:st="on"><font size=5 color=black
face="Times New Roman"><span lang=EN style='font-size:16.0pt;color:black'>Mexico</span></font></st1:country-region></st1:place><font
size=5 color=black><span lang=EN style='font-size:16.0pt;color:black'> Tops
List of Trade Issues Facing White House <o:p></o:p></span></font></h1>
<h3 style='line-height:200%'><font size=1 color="#666666" face=Helvetica><span
lang=EN style='font-size:8.5pt;line-height:200%;font-family:Helvetica;
color:#666666'>By <a
href="http://online.wsj.com/search/search_center.html?KEYWORDS=MEENA+THIRUVENGADAM&ARTICLESEARCHQUERY_PARSER=bylineAND"><font
color="#093d72"><span style='color:#093D72;text-transform:uppercase;letter-spacing:
.75pt;text-decoration:none'>MEENA THIRUVENGADAM</span></font></a> And <a
href="http://online.wsj.com/search/search_center.html?KEYWORDS=HENRY+J.+PULIZZI&ARTICLESEARCHQUERY_PARSER=bylineAND"><font
color="#093d72"><span style='color:#093D72;text-transform:uppercase;letter-spacing:
.75pt;text-decoration:none'>HENRY J. PULIZZI</span></font></a> <o:p></o:p></span></font></h3>
<p><st1:State w:st="on"><font size=3 color=black face="Times New Roman"><span
lang=EN style='font-size:12.0pt;color:black'>WASHINGTON</span></font></st1:State><font
color=black><span lang=EN style='color:black'>—The Obama Administration's
top trade negotiator said the <st1:country-region w:st="on">U.S.</st1:country-region>
was working quickly to resolve a damaging trade spat with <st1:country-region
w:st="on">Mexico</st1:country-region>, one of several obstacles to the
president's goal of doubling <st1:place w:st="on"><st1:country-region w:st="on">U.S.</st1:country-region></st1:place>
exports within five years.<o:p></o:p></span></font></p>
<p done4=99><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>"We understand the sense of urgency,"
said U.S. Trade Representative Ron Kirk after a speech at the National Press
Club. <o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>He didn't specify what measures the White
House was taking to resolve the <st1:place w:st="on"><st1:country-region w:st="on">Mexico</st1:country-region></st1:place>
issue.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>Business groups warned Tuesday that <st1:country-region
w:st="on">U.S.</st1:country-region> companies hurt by punitive tariffs imposed
by <st1:place w:st="on"><st1:country-region w:st="on">Mexico</st1:country-region></st1:place>
a year ago are at risk of having to lay off thousands of workers unless the
dispute is resolved soon. <o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>"The current situation is
unsustainable," said John Murphy, vice president of International Policy at
the U.S. Chamber of Commerce.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>"We can't wait and wait and
wait," he said. "On trade, when we stand still we fall behind." <o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>A bipartisan group of lawmakers has also
called on the administration to act, citing job losses in their states.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>The White House has set a goal of adding
two million jobs to the economy by doubling exports. President Barack Obama is
expected to focus on trade during a speech Thursday at the U.S. Export-Import
Bank's 2010 annual conference.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>But the administration faces a lengthy
list of trade issues—and opposition to trade-opening deals from
congressional Democrats and labor-union allies.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>In addition to the <st1:country-region
w:st="on">Mexico</st1:country-region> dispute, the White House has 30 days to
negotiate a deal with <st1:country-region w:st="on">Brazil</st1:country-region>
to avoid retaliatory tariffs on about 100 <st1:place w:st="on"><st1:country-region
w:st="on">U.S.</st1:country-region></st1:place> products, including cars,
cotton and certain agricultural items.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>Free-trade agreements with <st1:country-region
w:st="on">South Korea</st1:country-region>, <st1:country-region w:st="on">Colombia</st1:country-region>
and <st1:place w:st="on"><st1:country-region w:st="on">Panama</st1:country-region></st1:place>
remain stalled in the Senate several years after they were introduced by the
Bush administration. And Mr. Kirk said it was unlikely that the <st1:place
w:st="on"><st1:City w:st="on">Doha</st1:City></st1:place> round of global
trade-opening talks would come to fruition this year. <o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>Separately, Mr. Kirk said the <st1:country-region
w:st="on">U.S.</st1:country-region> was continuing to study whether to make an
appeal to the World Trade Organization challenging <st1:place w:st="on"><st1:country-region
w:st="on">China</st1:country-region></st1:place>'s Internet censorship
practices. <o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>Some business groups consider the Mexican
trade dispute the most acute issue for <st1:place w:st="on"><st1:country-region
w:st="on">U.S.</st1:country-region></st1:place> businesses and farmers.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>The root of the clash is Congress's move
in 2009, backed by the Teamsters union, to cancel a pilot program launched in
2007 that allowed Mexican trucks to travel into the <st1:place w:st="on"><st1:country-region
w:st="on">U.S.</st1:country-region></st1:place> beyond the commercial border
zone. The program was aimed at satisfying a component of the North American
Free Trade agreement. <o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>Mexico retaliated by slapping $2.4 billion
of tariffs on a range of U.S. manufactured and agricultural products, saying
the U.S. action violated the North American Free Trade Agreement.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>The funding restriction that killed the
pilot program is not present in the government's 2011 budget proposal, a
development with which Mr. Kirk said he was "most pleased." <o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>A coalition of groups led by the U.S.
Chamber of Commerce and the National Association of Manufacturers said Tuesday
that the Mexican tariffs have caused $2.6 billion in lost exports and more than
25,000 lost jobs.<o:p></o:p></span></font></p>
<p><st1:country-region w:st="on"><font size=3 color=black face="Times New Roman"><span
lang=EN style='font-size:12.0pt;color:black'>U.S.</span></font></st1:country-region><font
color=black><span lang=EN style='color:black'> companies exported about $129
billion in goods and services to <st1:country-region w:st="on">Mexico</st1:country-region>
in 2009, making <st1:country-region w:st="on">Mexico</st1:country-region> among
the top <st1:place w:st="on"><st1:country-region w:st="on">U.S.</st1:country-region></st1:place>
markets.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>Companies that have borne the cost of the
tariffs without raising prices, in a bid to maintain sales in Mexico, can't
keep doing so for much longer, said Doug Goudie, NAM's director of
international trade policy.<o:p></o:p></span></font></p>
<p><font size=3 color=black face="Times New Roman"><span lang=EN
style='font-size:12.0pt;color:black'>"This will take pain from the bottom
line to the unemployment line," he said.<o:p></o:p></span></font></p>
<p done4=102><strong><font size=2 color=black face="Times New Roman"><span
lang=EN style='font-size:10.0pt;color:black'>Write to </span></font></strong><font
size=2 color=black><span lang=EN style='font-size:10.0pt;color:black'>Meena
Thiruvengadam at <a href="mailto:meena.thiruvengadam@dowjones.com">meena.thiruvengadam@dowjones.com</a>
and Henry J. Pulizzi at <a href="mailto:henry.pulizzi@dowjones.com">henry.pulizzi@dowjones.com</a>
<o:p></o:p></span></font></p>
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