Report indicates U.S.-Mexico cross-border trucking dispute may be settled soon

By Staff
June 15, 2011 - LM Editorial

A Bloomberg report released earlier this week stated that Mexican Economy Minister Bruno Ferrari said his country will sign a formal agreement to end a cross-border trucking dispute with the U.S. as early as this month, setting the stage for the Latin American country to remove punitive tariffs.

In 2009, the pilot program for cross-border trucking was eliminated as part of the White House’s $410 billion Omnibus Appropriations Act, H.R. 4105. Even through this program-killing measure was approved, that Obama administration said it would work to create a new cross-border, long distance trucking program between the U.S. and Mexico.
Soon after the program was eliminated, the Mexican government said it would place tariffs on roughly 90 American agricultural and manufactured exports as payback for the U.S. decision to shutter the program.

These tariffs amount to $2.4 billion of American goods, ranging from fruit juices to pet food to deodorant, among others, ranging from 10 percent to 45 percent, with affected products coming from 40 states.

In March, the U.S. and Mexico said they reached an agreement for how to resolve the long-history of issues the program has witnessed, especially in the last two years. They said that they have come up with a solution that will “allow for the establishment of a reciprocal, phased-in program built on the highest safety standards that will authorize both Mexican and United States long-haul carriers to engage in cross-border operations under NAFTA.”

DOT officials said that the “proposed new program prioritizes safety, while satisfying the United States’ international obligations…[and] builds upon the progress announced by Presidents Obama and Calderon in early March.”

DOT added that the proposed new program also will promote economic opportunities and job growth in the United States.

Representative Peter DeFazio (D-OR), Ranking Member of the House Subcommittee on Highways and Transit expressed his concern about the plan to allow Mexican trucking companies to operate long-haul in the U.S.

In a letter to Department of Transportation Secretary Ray LaHood, DeFazio expressed his concern about the plan to allow Mexican trucking companies to operate long-haul in the U.S.

“I am greatly concerned that the Administration is not launching a pilot program, but rather starting the full liberalization of cross-border trucking,” wrote DeFazio. “A true pilot program should grant a discreet number of Mexican carriers the opportunity to operate beyond the commercial zones at the U.S.-Mexico border. The U.S. government would strictly monitor the operations of these carriers, and at the end of the pilot program, suspend any further operations while evaluating the results.”

DeFazio also requested additional details regarding the proposed pilot program, which would allow Mexican trucks to operate on U.S. highways beyond the current border commercial zone and allow Mexican carriers to obtain permanent operating authority from the U.S. Department of Transportation (DOT) after 18 months in the pilot program.

After the 18-month period, DeFazio wrote that this authority becomes permanent indefinitely if the carrier does not have an egregious safety record or a lapse in insurance.
DeFazio also expressed his opposition to a proposal in the White House’s Fiscal Year 2012 budget, which calls for the FMCSA to use $4.3 million in operating expenses for the pilot program, which would come out of the Highway Trust Fund.

White House officials have previously stated that once a final agreement is reached, Mexico will suspend its retaliatory tariffs in stages beginning with reducing tariffs by 50 percent at the signing of an agreement and will suspend the remaining 50 percent when the first Mexican carrier is granted operating authority under the program.  They added that Mexico will terminate all current tariffs once the program is normalized, and said that the agreed schedule will not affect the rights and obligations of Mexico or the United States under the NAFTA, including Mexico’s right to apply its retaliatory measures.



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About the Author

Jeff Berman, News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman.

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