The Reality of NAFTA - A Customs Broker's Perspective

Given the recent headlines on US and Mexico Trade Negotiations, a practical approach is needed to cut through the rhetoric.  Allow me to present a brief analysis of the issue from a day to day operations perspective.

I have a degree in Economics, have worked in Intl business for 27 years, and am a Licensed Customs Broker. I have been an advocate for free trade all my life.  Thus having established my bonafides, I will comment on the threat of increased import tariffs for Mexican products and hope to inject real world practical examples into economic and political theory.

In a vacuum, which all economic theory functions, increased US tariffs prop up inefficient and unprofitable US industries, and inflate prices for US consumers. When US exports are charged a high tariff, our US goods are more expensive and we sell fewer items. In this scenario, high tariffs hurt everyone.

This is the economic model in which ALL trade agreements start and why they have been so popular since the 1940's. It is in general why conservatives and moderates are "Free Traders". This was the thought behind the bi-partisan support of NAFTA.

Life Before NAFTA

What the general public does not know is that prior to NAFTA, the US had a free trade agreement with Mexico that went "One Way". Their goods came into the US largely duty-free. Our goods exporting to them had an average import tariff of 25%.

NAFTA was supposed to bring down Mexican tariffs and eliminate "pre-shipment inspections".  The US already had a zero tariff for their goods and no pre-shipment inspections were required.

When NAFTA was signed, Mexico had a number of years to implement the reduction in US tariff rates. What the trade agreement did not address was Mexico's VAT tax on all imports

Nor did NAFTA address "Non-Tariff Barriers to Trade"

Non-Tariff Barriers are more incidious than tariffs, they are designed to frustrate, block, and hamper trade while escaping the attention of clueless trade negotiators.  Here are some examples:

Licenses:  The Mexican government requires that Mexican importers obtain import licenses for a vast number of products.  The license is an application to Economics Secretary and is generally valid for 9 months.  A permit has to be reapplied for repeatedly, it does not automatically renew, and requires a new full application and proof that the previous permit was used.  Each branch of the Mexican government can require their own departmental permit, for example, medicine has to have an import permit AND Health permit.

Permits:  Some products don't require a license but need a permit which is a governmental written approval process to import products.  This can be lengthy and arbitrary.  Mexico can effectively not take action on applications which the prohibits large classes of merchandise.

Restrictions on Ports of Entry:  Permits are also limited to specific ports of entry.  Thus, if an importer has an import permit in Mexico City, he effectively can't import through Laredo.  This means, for all practical reasons, the only way this client can import from the US is via Air Freight, which is much more expensive that truck freight.

Approved Importers:  There is a cartel type industry in Mexico where small importers and exporters can "use license and permits" of "approved importers".  So in our example above, the Mexican Importer with a permit in Mexico City can engage an "Approved Importer in Laredo" for a truck shipment.  The rates these outfits charge are so outrageous that most just give up and try to find other markets to sell their products.  They prey on the hapless exporter and importer who import a single AA battery without a permit, their $50,000 shipment is held up over a battery.  Thousands of dollars in storage, delays, and penalties ensue.  (I speak from experience...)

Prepayment of Duty and Taxes:  Mexico also requires that all duty and taxes be paid at the time of border crossing and clearance.  This slows down the process and can make for an arbitrary environment where corrupt officials decide the duty due.  If the parties do not agree on tariff number or valuation, the Mexican Customs official refuses the entry, the cargo is turned away to sit with storage.  The delay fees that often outweigh the payoff.

Mexican Customs Brokers can not be forwarders or trucking companies.  There are always two or more parties involved in the clearance into Mexico. This doubles the handling costs, causes inefficiencies, creates delays, and removes the streamline that complicated supply chains need to function.

What Mexico accomplished with "Non-Tariff Barriers" is they effectively made it impossible for the small and medium US exporter and the small and medium MX importer to do business together. The imports from Mexico flow in like a fire hose while exports into Mexico flow in through a stingy coffee stirrer with a hole in it.

Importing into Mexico is expensive, complicated, difficult, and utterly corrupt - by design. 

What's the real cost:  While Mexico reduced their tariff from 25%, they still subject US goods to about 10% duty + 16% VAT + Other fees and tax.  Mexico then levies an estimated 28% tax on US goods.  By contrast, the USA levies an average 1% duty plus a 0.365% processing fee.  Thus, a 20% tax on Mexican imports is still lower than the effective rate they charge us!

Contrast the USA:

The import environment of the USA is free from almost all of the restrictions I described above.  We have a beautiful free market.  Our companies and individuals are not required to obtain restrictive and costly import permits.  We are free to import just about any legal product into the US, in any port of entry that we chose. Of course, there are regulations and laws, but these are pretty simple and applied across the country by rule of law.  Importers have ten days to pay their duty and this is fixed by law so there is no specific agent making his share!

An importer in the US can expect to pay about $200 in fees and taxes on a small shipment from Mexico and have clearance and delivery within 48 hours.  The same transaction in Mexico cost $1500 and takes about a week, assuming all documents are in place.

Mexico has never lived up to the spirit of the North American FREE trade agreement

The weak, ineffective, globalist US Presidents Clinton, Bush, and Obama never uttered a word. All the while in the US, they raised minimum wage laws and put such a regulatory burden on manufacturers that producing in Mexico became very attractive. Consider the hostile business environment the USA has become: Unions, EPA, OSHA, Obamacare, high corporate taxes, high payroll taxes, and regulatory compliance that often requires a team of extremely high paid employees to manage, you have a perfect storm. The large multinationals have flourished - they benefited from cheap labor and lax regulations in Mexico while the famous Ross Perot "large sucking sound" was heard across the nation.

Pillowtex Worker Learns the Company is Closing

So, US workers HAVE lost jobs due to NAFTA, not because free trade is bad, but because NAFTA did not accomplish free trade between our nations. It was a parasitic deal that has been perpetuated on the US workers by passive US leadership, cunning Mexican politicians, and multinationals.

30 Day Jesus Challenge - Day 17 Abundant Life

Jesus Loves You.  It is actually hard to comprehend.  The person that knows everything about you, loves you anyway.

Jesus 10:10 tells us, "The thief comes to steal and to kill and to destroy, but I have come that they might have life, and that they might have it more abundantly."

Abundant Life

So He came because God loves you and wants you to live an abundant life.  The thief will try and twist what abundant means; it's not wealth and riches.  Living an abundant life in Christ is living without ambiguity, living without being the center of your own universe, believing in an all powerful and all knowing God that loves you is the definition of freedom and abundance.

Pray - Jesus, show me today what an abundant life means.  Help me understand how the life I live now is not the one you would have for me.

Why I Stopped Dieting for a Year

Abigail and Dolley readers I have been on a diet since I was 7.  On and off, of course, but for the vast majority of my life I have either been dieting or contemplating the next diet.  The weight struggle is never ending.  Like a gambling addict, I have had some great successes but most have been great failures; the great successes kept me going back for more. I have starved myself, given up entire food groups, counted calories, counted fat, counted carbs, counted fiber, counted points.  I have cleansed and fasted, I have taken medication, and in the last diet gave up wheat, corn, dairy, soy, and even my beloved coffee.  I have punished my body and my mind for not conforming to an ideal it was never made to comfortably be.  So this year, in April, after a particularly grueling diet (for which I lost 3 pounds that I regained while on the diet) I said enough is enough.

I declared that I was not going to diet or get on the scale for a full year.  A full year of not counting anything and not letting the scale determine my self worth.  I began going to a naturalistic doctor who is helping me heal.  I was a bit afraid, all chronic dieters have learned to not trust their own bodies, minds, and instincts.  Would I binge on every cookie and eat a quart of ice cream in one sitting?  I'd done that after a particular "elimination" diet.  To my surprise, I did none of that.

No Freedom of Speech in the Scientific Community

Abigail and Dolley readers I have in recent months watched a couple documentaries that have concerned me greatly:  The Great Global Warming Swindle and Expelled - No Intelligence Allowed.  Both of these documentaries demonstrate that the Scientific Community is effectively silencing dissension on Evolution and Global Warming.  They are taking away the Freedom of Speech for thousands of scientists that question the validity of these theories.

Careers and lives are being ruined for straying from the party line, even slightly.  Mere mention of Intelligent Design can get you fired.  I would venture to say that since Climategate, the opponents of Global Warming are not in as much danger as they were before, but that is really beside the point.  Suppression of free speech in the scientific community hurts everyone.  If scientists are not free to evaluate the evidence truthfully then real break through is not possible.

Scientists that make discoveries that bolster the arguments of the "other" side are forced to come out publicly and refute their findings in order to save their careers.  A case in point is the discovery of plasma, red blood cells, and connective tissues in a dinosaur bone. (To watch the video, click here: T-Rex Blood Cells).  This discovery flies right in the face of the old earth evolutionist of which the scientist who discovered it belongs.  Instead of being free to consider the possibility that this dinosaur bone is hundreds or thousands of years old, the lady is publicly declaring from the rooftops that she STILL believes in evolution and just can't explain why the pesky facts don't fit into their theory.

There in lies the rub, the facts just don't add up.  When scientists are discovering things that refute the pet theories they are too afraid to publish them, so they are hidden and covered up.  I am not a conspiracy theorist but there is enough evidence out there to validate this point.  Today, there are thousands of gifted scientists that will look through their microscopes, look at their data, and marvel at their discoveries but will be too afraid to share these with the world for fear that their careers will be ruined.

Testing Principals - If it Does Not Work in the Micro it Will Not Work in the Macro

For a principal to be true in the Macro is must also be true in the Micro.  Failed policies, beliefs, and philosophies ignore this truth and seek to impose their will on others.  History often bares this out but as a society we are so self important we believe that because we are involved, this time it will be different.  It will not be different, for there is nothing new under the sun.

Let me give you some examples:

Individually, we know if we work very hard for something we value it more than if someone just gives it to us.  Examples in the Macro - public housing vs. private neighborhoods.  Have you ever seen pictures of new public housing and then a retrospect of what the same housing looks like 10 years later?  It is shameful, but demonstrates the point.  If you are "given" a home you do not have to work for or earn, what insentive do you have to take care of it?  None!  If given a choice, which would you choose, where would you live?


Evolution vs. Creation - in Creation the beginning is God.  In Evolution they can not tell you the beginning.  If you can not start with the first atom and explain where that came from, everything there after is based on a false premise and is then applied to the world and the universe at large.

Sincere and honest belief makes something true, truth is individual, and should be tolerated as equally valid.  This premise is applied to the macro of "personal faith" all the time, but it is ludicrous when applied to the micro.  If I sincerely believe that the plate of potato salad in front of me is a steak sandwich no matter how sincerely I believe it, it does not make it true.  If I sincerely believe that Ronald McDonald is the son of God does my sincere belief deserve the same respect as those who believe that Jesus Christ is the Son of God?

Truth is relative - If I sincerely believe I am an alien from Ork does that make it so?  No, it only sends me to a mental hospital!  If a rapist believes he is making love to a woman and that there is nothing wrong with that, does that make rape okay?

Communism vs. Free Enterprise - Communism ALWAYS fails in the micro and the macro.  It is only in the minds of the Utopians where it doesn't.  Unfortunately, there are enough mislead and deceived souls out there that will ignore history, ignore real world examples, and continue to live in LaLa Land.

Thus, I have briefly demonstrated the point that if something is not true at all levels then it can not be true at any level.  We must reject the lies and insist on the truth.  We must stop "tolerating" irrational suppositions and shine the light of sense, reason, and logic on the things that are only true in someone's mind.  We must stop supporting policy and regulations that seek to ignore human nature and impose a misguided vision on those they seek to help.  It is time my friend to stop humoring those who believe the lies and it is time to start speaking the truth.

To Whom Are You Thankful?

In the season of celebration, so many of our fellow citizens are thankful to each other for their blessings instead of the Giver of all Good Things.  I pray that today, you are thankful to the Lord Jesus Christ who loved you so much He gave His Life for you.  Be thankful to Him that freedom to worship Him drove the Pilgrams and the Puritans to this land we love so much.  Be thankful to Him that your ancestors were brought here in chains so that you are born in the greatest country in the world.  Praise the Lord that He has protected you and blessed you in spite of your many failings.

Today, we give thanks and while I appreciate my family, friends, job, and all of my other blessings, I am not thankful to them - I am thankful for them.  Today, I will remember in the midst of the celebration to whom I am thankful.

Sarah Palin - A Woman After Our Own Hearts

Abigail and Dolley readers know that this blog is dedicated to examining current events through the intellect of Abigail Adams and the charm and grace of Dolley Madison - thus, we have determined that Sarah Palin is our kind of lady.  If times were different in 1776, Abigail Adams would have been sitting at the Massachusetts table of the Second Continental Congress with her husband John and his cousin, Samuel. Relegated to home and hearth, we have invaluable correspondence between Abigail and John and see her guiding and gentling hand in the preeminent Founders work.  Her support of women's rights was a century ahead of its time and it is through the eyes of a modern woman, I humbly thank my Grandmother's before me who have given me the rights I enjoy today as a strong American Woman.

It is with these eyes that I wonder, why does the media hate Sarah Palin?  She reminds me of all that is good in American Women.  She reminds me of myself in many ways.  Why then does the media hate me?

We like Sarah Palin because she is strong enough to stand up for her convictions and to back up her words with actions.  We like Sarah Palin because she values liberty, freedom, and family.  We like Sarah Palin because she does not wait around for others to lead.  We like Sarah Palin because she supports our military.  We like Sarah Palin because she would actually impose sanctions on Iran and not just talk about it.  We like Sarah Palin because she is not so jaded she looks at a problem and says, "it's too big to fix".  We like Sarah Palin because she can answer a question without a teleprompter.  We like Sarah Palin because when she answers the question, you can believe what she said because she actually answered the question and did not give a political slide and duck that could mean two or more things without saying a word.  We like Sarah Palin because she did not abort her Downs Syndrome Child.  We like Sarah Palin because she can laugh at herself.  We like Sarah Palin because she is a Believer.  We like Sarah Palin because she took on corruption in her own party and in her own state.  We like Sarah Palin because she sold the Governor's Jet.  We like Sarah Palin because she sees the connection between energy Independence and National Security.  We like Sarah Palin because she believes we should kill the Caribou and take their oil.  We like Sarah Palin because for the first time since Ronald Reagan we have a dynamic conservative leader.We like Sarah Palin because she would be right at home at a Tea Party.

We like Sarah Palin because in our day, Abigail and I could not run for President, but Sarah Palin sure can.

It Has to Be Manmade, Because If it Isn't.....

Global Warming, Climate Change, or whatever they are calling it this month (always to suit their political ambitions, goals and the temperature of the day) HAS to be man made, because if it isn't then the consequences are devastating to the believer.  Abigail and Dolley readers know that if you base your world view on a system of beliefs that turns out to be false, then you are shattered at the realization.  All of our beliefs, actions, goals, and dream are formed and shaped by how we view the world.  If we have put our faith in a worldview that turns out to be false, then our entire existence becomes meaningless.  Everything we have worked for and believed in was based on a lie and we are diminished in our own eyes as well as the eyes of the world. 

Thus, in spite of what hundreds of scientists are proving, despite what even the most simple minded troglodyte can observe out their back porch, and in spite of the exposure of greed and capital gain that green leaders stand to make from green energy, the staunch environmentalist will not change their mind.  To do so will destroy their soul.  It will nullify their beliefs, their lives, and call into question their ultimate belief and worship of the earth.  They will stand in the face of overwhelming evidence and shout you down.  You are a heretic, a hypocrite, and a blasphemer.  They will not change, they will not concede, and they will not ever stop.

Tyrannical and fascist Islam shares the same goals and end game with the environmentalist. Take over of the world, conversion of its inhabitants, death to the infidels, global government and control.  Their methods and ideologies differ only in their Utopian visions of earth.  One comes with a gun and a bomb - the other with laws and regulations that will collapse and strangle the system into submission.  Both must be fought with equal fervor, both are a danger to our liberty, society, and our freedom.  The difference is one is wearing a suit and flying to Copenhagen for a conference and the other is building nuclear facilities and stoning women and protesters in the street.

Obama has unclenched his fist at the one and is participating with the other.

Can You Imagine if Geoge W Bush did this? Part 2

We've played this game before and if you are so inclined, refer to Part 1 ; it was so much fun, I am sure Abigail and Dolley readers would love to play again.

Can you imagine if GWB had, in the face of a Terrorist attack on the largest military base in the world, opened his nationally televised address with 3 minutes of light hearted banter?

Can you imagine during that light hearted banter if he had mistakenly referred to an audience member as a Medal of Honor winner, when the man was a Medal of Freedom winner, who GWB had given the honor to three months before?

Listen closely, you will hear the media uproar, wait for it..... {{Cricket}}  {{Cricket}}  Oh, sorry that was wishful thinking.

Shall I write up the piece?  Yeah, sure, what the heck?

In another display of ignorance and callousness, GWB in the face of the worst tragedy of terrorism since 9/11 joked with his audience while a grieving nation watched.  The nation looks to the President in times of crisis to calm and comfort us, and what did we get from this bumbling Texas buffoon?  I will let you, jokes and shout outs.  As further evidence of his lack of intellect the President referred to Joe Crow as a Medal of Honor winner.  The Medal of Honor is the highest military honor in the country and is reserved for military personnel who display outstanding courage and honor in the face of battle.  Joe Crow is not a Medal of Honor winner and should not have had the military's highest honor attributed to him by the President especially in light of the military attack just hours before.  No, Joe Crow is a Medal of Freedom winner and GWB should have known this, since three months ago, he himself had personally awarded the medal.  What an idiot.

Death - Puppies, Kittens, and Children Should be Destroyed!

What a title, huh? Ludicrous, isn't it? Who is against puppies, kittens, and children? Who for that matter is against education and environment? I mean what kind of monster are you anyway? Who in their right mind can possibly object to the President speaking to school kids about staying in school and doing their best? What could possibly be wrong with treating the earth with respect and promoting clean energy solutions? Clearly, if you object to such wholesome and fundamentally sound principals you are not worthy of consideration and are indeed worthy of my disdain and ridicule. Most folks leave it at that and go blindly about their business, never stopping to consider more than the 15 second, scoffing talking head coming through their TV screen. They mutter on their way to the government mandated low water toilet,(that doesn't flush the first time), that the Right Wing Nut Jobs are at it again.

In the Spirit and Audacity of Logic, let us examine in depth what could possibly create such sentiments and determine if the thinkers are indeed worthy of your disdain or if perhaps, they may actually know what they are talking about.

For the sake of brevity, for this post, I will concentrate on the logic behind the position of objecting to President Obama addressing the Nation's school children next week.

1. Protocol for an address of this nature is not being observed. Instead of going through the established channels the DOE went directly to school principals. Why?
2. The lesson plan published on the DOE initially had school children writing a letter to themselves on how they were going to help the President. That has since been retracted and spun in such a manner that the students will now write a letter to themselves about how they are going to achieve their own goals, but the hasty spin and retraction speak loudly to initial intent. Does it bother you that children are being recruited to help ANY President? What if it was George W Bush?
3. The President would not initially release the material of the address until pressured and will only now release the contents the day before. Why?
4. Teachers are encourage to print portions of the President's address in bold signs and hang them in the classroom - innocuous right? Not so, when you consider that the 15-18 year olds will be potential voters in the next Presidential election. Is High School an appropriate place to try and win voters?
5. Why address ALL the school children in America on their first day or school? Don't teachers and administrators have enough to do that first day without trying to gather all the children together for another speech by the President? What does this say about the priorities and character of the President?
6. Why not release it on the web and let parents watch it with their children? Why circumvent the parents in this process?

Regardless of your political beliefs and leanings, what do you disagree with on the above? If you do, which point and why?

There are a myriad of other reasons that parents may object to this based on their political beliefs, their concern over the direction of the country under this administration, and the narcissistic totalitarianism feel such a move brings to mind - but this blog is intended to move beyond political affiliations and look at the heart and the logic of the issues.

Further, I hope this blog can serve to unite us as "We the People". Only then can we begin to concentrate on the things that bind us together like love of country, family, freedom, and the pursuit of the American dream. By educating ourselves and engaging in critical thinking perhaps we can recognize opportunities and dangers to our Republic and our way of life before they have disappeared into the all consuming organism we now call the Federal Government.

Is it Starting to Work?

I am encouraged, perhaps a bit premature, but encouraged regardless. After months of very little to cheer about (except the Tea Party Movement and the reawakening of the Great American Freedom Machine), we have had several moves in the right direction:

• California voted this week against new taxes.
• The Fed refused to co-sign on California additional borrowing.
• The Senate went against the Teleprompter in Chief and voted against closing Gitmo without a plan.
• The EPA determined that pursuing Carbon Dioxide as a pollutant would fundamentally hurt the economy.

Amidst all of the noise from our Nation's Capital - this is all good news. These are all victories for common sense. People are starting to wake up.

Can you imagine the impact if the Californians rise up en mass and say, "Stop It!"? The great state of California, home of Ronald Reagan, unbelievable natural beauty and resources - if they said, no more.

The Fed not backing a failed California Government is a good thing. You can not bail out someone who has not changed their behavior.

On the Senate not closing Gitmo, I heard Mitch McConnell say, "We need a plan, Mr. President, not another speech." I resoundingly say, "Here Here!"

The EPA determining not to classify what air breathing creatures EXHALE as a pollutant is a good thing folks. Now I will admit, that when Mr. Franklin and Mr. Washington returned from a "Smoker" at their previous club, the exhales might have righteously been classified as pollutants... but none the less, this is a victory for common sense.

I Don't Want to, but I Have to

Abigail and Dolley readers may not know, but I have never been a political activist. I have always held strong opinions and enjoy a good debate, but I have never been one to do more than write an occasional email to my congress person or a letter to the editor. For many years, I have actually checked out of current events entirely. I found the lies and political posturing on both sides of the aisle repellent and simply tuned out. I find I can no longer in good conscience continue to bury my head in the sand. We are at a critical juncture in our country and if good people of conviction stand aside and do nothing then we are guilty of allowing the liberties and the foundations of our great country to erode in our lifetime.

With that said, I will be attending the Tax Day Tea Party in Charlotte on April 15th. I will be sending tea bags to all of my Congress People.

I am doing this as an American - unaffiliated with any party. I believe in the Constitution and the framework put forth by our Founding Fathers. I believe in a return to small government and freedom of the free enterprise capitalism that has made this country great.

Ronald Reagan said it best, "Government is the Problem, not the Solution."

It is too important to stand idly by - I don't want to, but I have to.