Mexican trucks were supposed to have been given free access years ago under provisions contained in the North American Free Trade Agreement (NAFTA) but under U.S. policy to date, have been limited to a 25-mile commercial zone along the U.S. border. The result, according to government estimates, has been hundreds of millions of dollars in unnecessary costs to consumers each year.
The first step in making good on U.S. obligations under NAFTA, Secretary Peters explained, will be the launch of a yearl-ong "pilot" project beginning later this spring that will allow some 100 Mexican trucking companies—and an equal number of U.S. trucking companies—o travel freely on each other's interior highways. The Department of Transportation (DOT) predicts the economic impact of this new initiative will be dramatic considering that some $2.4 billion in trade flows between the U.S., Mexico and Canada each day, 75% of which is carried by commercial trucks.
Despite these economic advantages, however, the plan has come under attack from lawmakers, public interest groups, organized labor, citizens groups and others. The basic concern being—as characterized by Teamsters President James Hoffa in recent Senate testimony—that the U.S. government is "playing Russian Roulette with highway safety and national security" by allowing Mexican commercial truckers access to U.S. highways.
Considering that U.S. exports of nonwoven roll goods to Mexico reached nearly $300 million in 2006, and U.S. imports of Mexican roll goods exceeded $50 million last year as well, the impact of the cross border trucking plan on members of INDA, Association of the Nonwoven Fabrics Industry, could be considerable. And, with this in mind, this article reviews the general history of the issue, as well as some of the key features of the pilot program.
Although the prospect of Mexican trucks having virtually unlimited access to U.S. roads has generated controversy, there is actually a considerable amount of history to the issue.
Until the early 1980s, in fact, motor carriers from Mexico were able to travel U.S. roads freely, provided they applied for and obtained certification to operate from the Interstate Commerce Commission (ICC).
This came to an end, however, when Congress abolished the ICC and a host of other factors came into play. Once Mexican trucks were restricted on U.S. highways, it did not take long before the Mexican government retaliated by prohibiting U.S. commercial trucks from driving on Mexican roads. This persisted until 1993 when NAFTA rules specified a gradual phase-out of cross border trucking restrictions between both countries. Specifically, NAFTA mandated that, starting in 1995, transportation in either direction at the border would be allowed and virtually unrestricted cross border access be put into place by the turn of the millennium.
But, in 1995 the White House balked—citing concerns about Mexican motor carrier safety standards—and unilaterally suspended U.S. implementation of the phase-out provisions. Not surprisingly, Mexico responded in kind and, after several unsuccessful rounds of tense negotiations, eventually filed a claim against the U.S. in 1998 under the NAFTA dispute resolution process. The NAFTA dispute panel sided with Mexico, ruling in 2001 that U.S. actions had violated terms of the trade pact. This decision, in turn, left the U.S. government with a choice: lift U.S. restrictions on Mexican trucks or risk being subjected to sanctioned economic retaliation by the Mexican government.
The White House responded in 2002 with the announcement that it would end restrictions once the Federal Motor Carrier Safety Administration (FMSCA) had a chance to develop revised standards for Mexican motor carriers. But, even after the FMSCA released its revised standards, implementation was delayed again, this time due to a lawsuit charging that the U.S. had failed to meet environmental impact assessment requirements spelled out in the Clean Air Act and the National Environmental Policy Act.
Eventually, the U.S. Supreme Court intervened in 2004, ruling that environmental impact assessments need not be performed—a ruling that enabled the White House to lift U.S. restrictions on commercial trucks entering from Mexico. This, according to Secretary Peters, equals "a better way to do business."
Case in point: according to U.S. data, commercial trucks from Mexico now make about 4.5 million border crossings each year but are only allowed to travel to the edge of the 25 mile commercial zone on the U.S. side. After that, trucks from Mexico must off-load and transfer their cargo to U.S. companies before they are allowed to proceed. Eliminating this cost alone, Secretary Peters said, will save consumers some $400 million a year.
The U.S. has already received some 800 applications from Mexican firms hoping to participate in the pilot program. Those selected, according to Secretary Peters, will be thoroughly vetted by U.S. safety inspectors to ensure they meet "…every U.S. safety regulation on the books." Under the pilot program, for instance, Mexican trucks will have to be insured by a U.S.-licensed firm and meet U.S. safety standards for mechanical systems including brakes, turn signals and cargo-securing equipments and more. In addition, commercial drivers entering the U.S. from Mexico will have to hold commercial drivers licenses, provide proof of medical fitness, comply with U.S. hours-of-service rules and demonstrate comprehension and fluency in the English language.
Once the safety audits have been completed and proof-of-insurance has been verified—a process DOT expects will take about two months —Mexican participants in the pilot program will be allowed to make international deliveries and pick-ups throughout the U.S. Similarly, some 100 U.S. trucking companies will be given the freedom to travel south of the border under the new pilot program as soon as they complete their application process with the Mexican government. Officials predict that Mexico will begin accepting U.S. applications in approximately six months.
Despite the stringent safety measures that will be in place during the pilot program and beyond, forces opposed to the policy continue their opposition to the new initiative, arguing that the safety measures will not do enough to protect U.S. drivers, and will place an additional strain on an already overtaxed border security system. Not so, U.S. DOT counters, pointing out that the Agency has invested approximately $500 million to modernize border facilities and hire/train some 500 new inspectors.
As for commercial interests, Mary Irace of the National Foreign Trade Council spoke for many when she recently said, "A cross border trucking pilot program will encourage expansion of an already robust trading relationship with Mexico. We are pleased with the Administration's efforts to continue following through on our NAFTA commitments."
So far, 10 commercial trucking companies from the U.S. have applied to take part in the pilot program. For more information, please visit www.dot.gov.