United States Proposes to Open Roads to Mexican Trucks
The Transportation Department’s compromise seeks to revive efforts to fulfill a key provision of the North American Free Trade Agreement (NAFTA), which is highly unpopular with labor but supported by many businesses as a cost advantage.
U.S. Transportation Secretary Ray LaHood called the plan by his agency a starting point to renew negotiations with Mexico, which has slapped tariffs on U.S. products over the delay.
The Transportation Department said the plan, which would eventually need congressional and Mexican government approval, would prioritize safety and that a formal proposal is due to be announced in coming months.
The countries would negotiate the number of carriers allowed to participate in a first phase. Applicants would be vetted by U.S. law enforcement agencies. Trucking safety programs would be reviewed and each vehicle would be inspected and certified by highway safety and environmental officials.
Prospects for an agreement are uncertain. The plan has failed to move ahead over the past decade regardless of which party controlled the White House or Congress.
But the Obama administration felt more comfortable issuing a proposal with the program’s fiercest critics, labor friendly Democrats in the House, voted out of office in November or sidelined to the minority.
Mexico said it would review the plan, calling it a positive first step, and said tariffs would be lifted after a trucking agreement is completed.
“In general this is very good news,” said Humberto Trevino, Mexico’s deputy transport minister.
Currently, big rigs from Mexico must offload their goods near the border so U.S. trucks can haul them the rest of the way.
Business Sees Benefits
Allowing cross-border trucking could increase competition, add capacity in the domestic market, and offer other benefits to business.
Among the potential beneficiaries are farmers and livestock producers affected by the billions of dollars in tariffs on agricultural and other goods shipped to Mexico from the United States.
Mexico is a leading importer of U.S. pork, but currently it has a 5 percent duty on that product. It is widely believed the duty was applied in response to the trucking dispute.
Labor and consumer groups and their allies in Congress for years blocked the trucking initiative from progressing beyond small pilot programs. They were concerned about safety and potential job losses.
James Hoffa, president of the Teamsters union, called the new move disappointing and another opportunity to open the border “to unsafe trucks.” He stressed the move was ill-timed considering the tough economy.
“Why would DOT propose to threaten U.S. truck drivers’ and warehouse workers’ jobs when unemployment is so high,” Hoffa said.
U.S. companies represented by the National Association of Manufacturers said a swift deal on trucking was necessary to counter gains by competitors in Canada, China and South American nations that have increased market share in Mexico.
Reporting by John Crawley; Additional reporting by Doug Palmer, Bob Burgdorfer, James Kelleher, Lynn Adler, and Mica Rosenberg; Editing by Sandra Maler and Cynthia Osterman.