Obama criticized for Mexico, Brazil sanctions

WASHINGTON (Reuters) - Republicans and business groups on Tuesday criticized President Barack Obama's administration for failing to resolve a cross-border trucking dispute nearly one year after Mexico slapped retaliatory duties on about $2.4 billion worth of U.S. exports.

"Record numbers of Americans are receiving an unemployment check instead of a paycheck. We need to make it easier for employers to create jobs and export American-made goods. Yet this administration is doing just the opposite," Representative Dave Camp, a Michigan Republican, said in a statement.

John Murphy, vice president for international policy at the U.S. Chamber of Commerce, also criticized the administration for failing to prevent Brazil on Monday from announcing an estimated $591 million in new trade retaliation in a separate spat over the U.S. cotton subsidies and export supports.

"For the sake of American workers and farmers, we can't allow a pattern to emerge in which Washington's inaction on trade puts jobs at risk," Murphy said.

Mexico's embassy in the United States issued a statement urging the Obama administration "to come forward with a specific proposal to resolve" the trucking spat, adding it would keep tariffs in place until a deal is struck.

Obama recently set a goal of doubling U.S. exports in five years to help create 2 million jobs and is expected to flesh out his ideas on trade in a speech on Thursday at the U.S. Export-Import Bank's annual conference.

The United States agreed to open its market to Mexican trucks as part of the North American Free Trade Agreement that went into force in 1994, but the U.S. Teamsters union and many of its supporters in Congress have fought implementation of the pledge.

One year ago, Congress voted to cancel funding for a cross-border pilot program begun by former President George W. Bush's administration that allowed Mexican long-haul trucks to circulate in the United States.

FRUIT, VEGETABLE DUTIES

The move infuriated Mexico, which retaliated by imposing duties on U.S. exports, including fruit, vegetables and industrial goods worth an estimated $2.4 billion.

It was entitled to take that action under a 2001 NAFTA panel ruling in the trucking dispute in Mexico's favor.

A U.S. Chamber of Commerce study estimates the tariffs could cost 25,000 American jobs, as other countries like Canada or Colombia supply Mexico with goods that used to be sold by the United States.

John Keeling, executive vice president of the National Potato Council, told reporters it was "very easy" for Canadian French-fried potato producers to fill the gap after U.S. fries were shut out of Mexico by the tariffs.

"From April to December, U.S. exports of frozen processed potatoes have fallen by 50 percent in value and at that same time, Canadian exports have risen by almost an identical amount," Keeling said.

U.S. manufacturers in sectors including chemicals, paper, personal care and pet food are also feeling the pinch from the duties, said Doug Goudie, director of international trade policy at the National Association of Manufacturers.

"You've got about 16,000 manufacturing jobs in the United States that either have been lost or at risk of being lost," Goudie said.

Last week, U.S. Transportation Secretary Roy LaHood told lawmakers the administration was "finalizing a plan" to resolve the trucking disputing.

"The reason it's taken so long is because there's a lot of different moving parts, including about five different cabinet officials and every time we make a tweak or a change everybody has to sign off on it," he said. "But we're very near a proposal that we think will meet all of the safety concerns that I heard when I talked to 25 members of Congress."

Meanwhile, Brazil detailed on Monday a list of about 100 U.S. goods it plans to hit with duties next month because of Washington's failure to comply with a World Trade Organization ruling against U.S. cotton subsidies.

U.S. Trade Representative Ron Kirk, in a speech at the National Press Club, said the United States still hopes to strike a deal with Brazil to avoid the sanctions. If it can't, it will have to try to persuade Congress to change the U.S. cotton program to satisfy Brazil's concerns, he said.

Brazil's retaliation list includes a tariff increase on cars to 50 percent from 35 percent, a rise on non-hard-wheat tariffs to 30 percent from 10 percent, and a 48 percent levy on milk powder, up from 28 percent.

Cotton and cotton products would be charged a 100 percent tariff, the highest on the list.

Brazil is expected to publish by March 23 a separate list worth an additional $238 million in annual cross-retaliation penalties. That list would focus on intellectual property rights and services, Brazilian officials said.

(Editing by Alan Elsner and Philip Barbara)