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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Mexico
July 31, 2012 at 10:00 AM

A serious (non-arena) problem for the port

Shippers pay $1.25 for every $1,000 worth of cargo that goes through American ports. This is the Harbor Maintenance Tax. Canada and Mexico don’t charge a similar tax and a new report shows that the levy does put U.S. ports at a competitive disadvantage. “Pacific Northwest ports are facing an invisible blockade that is sending our business to Canada,” U.S. Rep. Rick Larsen, D.-Wash., said in a prepared statement last week. Larsen is the ranking Democrat on the Coast Guard and Maritime Transportation Subcommittee, which has jurisdiction on the issue in the House.

The Federal Maritime Commission study found that Canada and Mexico are not breaking any trade laws. It also stated that “many of the advertised benefits of foreign ports are not as significant as may be believed, for example, the transit time from China to inland destinations such as Chicago and Memphis through the Port of Prince Rupert as opposed to ports in the United States.”

American ports are found to be competitive internationally. “However, it would appear that the (Harbor Maintenance Tax) makes the challenge more difficult. This is especially the sentiment of the ports that are competitive with Canadian and Mexican ports.” It quotes Tay Yoshitani, CEO of the Port of Seattle: “A lot of factors go into the routing of cargo and a lot of carriers/shippers want diversity in how they get cargo to warehouses…cost is always an issue, and the HMT clearly disadvantages us against Canadian ports.”

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Comments | More in Canadian economy, Infrastructure, Mexico, Ports of Seattle and Tacoma, Railroads, Trade

June 14, 2012 at 9:55 AM

Opportunity and enigma in Mexico

How much can a country stand and still go on with daily life? Mexico is a prime example. An estimated 50,000 people have been killed since President Felipe Calderon began waging an aggressive fight against the drug cartels — which supply our appetites. At the same time, Mexico is building a middle class that is becoming its majority.

So it’s no surprise that Costco Wholesale is buying out its partner in its Mexican division for $760.4 million. With 112 million people becoming a middle-class nation, that’s plenty of customers. Wal-Mart thinks so, too — enough for the company to face allegations of corrupt business practices. Thus the enigma of Mexico: A rapidly developing country, not least thanks to NAFTA and its displacement of American workers, and yet much corruption in government and business.

Mexico accounted for nearly $1.4 billion in Washington exports in 2011 (It is the state’s 13th largest trading partner and America’s second largest, totaling $280 billion. The recession and anti-immigrant hysteria have slowed the illegal immigration rate; in many cases opportunities are greater at home. The U.S. still imports substantial Mexican oil, although the big fields there, especially Cantarell, are in decline.

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Comments | More in Costco Wholesale, Global economy, International economy, Mexico, Northwest companies, Trade