New Mexican Truck Rules May Ease Export Tensions


The Washington Times reports that a plan containing guidelines on getting Mexican trucks back on U.S. highways has gone through bureaucratic review, the first step toward ending Mexican tariffs on $2.4 billion worth of U.S. goods. The plan would help alleviate tariffs on at least $900 million in U.S. agricultural exports to Mexico, a large share of which is held by Colorado.

The tariffs were imposed by the government of Mexico under NAFTA guidelines after President Obama signed legislation that, among other things, ended the pilot program for Mexican trucks, Mexico quickly implemented the retaliatory tariffs, affecting 89 U.S. agricultural and industrial products from 40 states.

The sanctions have caused major headaches for both manufacturers and agricultural producers and business interests across the country are encouraged by the possibility of the ending of sanctions. A June 8 letter from 24 U.S. legislators to Mr. Obama noted that “many companies are being forced to shift production abroad or simply stop shipments.

Over $1.5 billion in U.S. manufactured products and $900 million in U.S. agriculture products are impacted by the retaliatory tariffs.”

Colorado agricultural exports have been hurt as well. Our state id the single largest exporter of potatoes and they now face a 20% tariff when crossing the southern border. Colorado also exports large amounts of onions and sunflower seeds to Mexico and tariffs on those products will hurt Colorado producers.

California Farm Bureau Federation sent a letter to the president last month warning that California agriculture alone stands to lose up to half of its exports to Mexico and that entire markets could be eliminated for some commodities.

In a sharp policy reversal, Debbie Mesloh, a spokeswoman for the Office of the U.S. Trade Representative, told the Associated Press that Obama has asked the office to work with Congress, the DOT, the State Department and Mexican officials to come up with legislation to create “a new trucking project that will meet the legitimate concerns” of Congress and the U.S. under the North American Free Trade Agreement, or NAFTA. The proposal to re-start the program has gone through the inter-agency review process and is ready to be presented to congress.


A Storied History

The cross-border trucking program as it was officially designated was implemented as a pilot program by the Bush administration as one of the last remaining components of NAFTA that had not been put together. Under NAFTA, Mexican trucks are allowed unrestricted access to American interstates, particularly those bordering Mexico, by the year 2000. The Clinton administration, under pressure from the Teamsters Union, blocked the trucking provision under the auspices of safety concerns.

The International Brotherhood of Teamsters continues to oppose the program citing safety concerns. Teamsters president James Hoffa says that Mexican trucks are unsafe and don’t meet Department of Transportation safety standards.

Under the Bush pilot program, Mexican trucking companies could cross the border into the United States without inspection. A Department of Transportation study released in October of last year found that Mexican trucks, in some cases, had a better safety rating than American trucks, and all were in full compliance with safety rules.

Under the Bush administrations pilot program rules, Mexican companies shipping goods into the U.S. must have been registered for the program and complete DOT safety inspections before entering the country. Drivers must have also demonstrated the ability to interoperate and understand American traffic signs.

The program was also criticized by congressional democrats with the strongest opposition coming from Sen. Byron Dorgan (D- ND) who has fought for the past two years to stop the project our of safety and job concerns. The Obama administrations desire to reinstate the program is seen as a blow to both Dorgan and labor interests who supported Obama in the 2008 presidential election, in part on his promise to renegotiate NAFTA to preserve U.S. jobs.

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2 responses to this post.

  1. […] the border has been a top issue for Calderon since the U.S. Congress, citing safety concerns, ended a pilot program in March that allowed some trucks access. Mexico retaliated by imposing $2.4 billion in tariffs on U.S. […]

    Reply

  2. […] by Shawn Martini in Ag Promotion, Trade. Leave a Comment Today marks the first anniversary of an ongoing trade dispute with Mexico. The dispute began when Congress terminated funding for the U.S.-Mexico cross-border […]

    Reply

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