The announcement that the U.S. and Mexico have reached agreement on a border trucking program garnered swift reaction among interested groups. Both the International Brotherhood of Teamsters (IBT) and the Owner-Operator Independent Drivers Assn. (OOIDA) issued strong statements opposing the deal, which was announced at a joint press conference at the White House yesterday by President Barack Obama and Mexico’s President Felipe Calderon.
In a statement from OOIDA expressing “outrage” at the announcement, executive vp Todd Spencer said it was “simply unbelievable” that the U.S. would agree to a deal. “For all the President’s talk of helping small businesses survive, his administration is sure doing their best to destroy small trucking companies and the drivers they employ,” he said.
Teamsters general president Jim Hoffa expressed similar sentiments, saying the deal “puts Americans at risk. This agreement caves in to business interests at the expense of the traveling public and American workers.”
(For more on cross-border trucking, click: Fleet Owner’s Special Report: Mexico: A one-way border.)
Not everyone, of course, is disappointed with the agreement.
“ATA is pleased that Presidents Obama and Calderon and their administrations have worked through their differences and have put our two countries on the path to resolving this issue after nearly 16 years,” said American Trucking Assns. (ATA) president & CEO Gov. Bill Graves. “We hope this agreement will be a first step to increasing trade between our two countries, more than 70% of which crosses the border by truck.”
The agreement, which Obama said will be sent to Congress for approval, will result in the immediate end to some of the $2.4 billion in tariffs on U.S. goods, according to the Wall Street Journal, that Mexico imposed immediately after the previous cross-border demonstration project was killed in March 2009. The rest of the tariffs would be lifted once Mexican trucks start crossing the border, the Journal said.
“This is an important step to promote job growth on both sides of the border and shore up our bilateral relationship,” said Thomas J. Donohue, president & CEO of the U.S. Chamber of Commerce. ”It is long past time for the United States to live up to its trade commitment and allow cross-border trucking services. This delay put more than 25,000 American jobs at risk, and retaliatory tariffs have been in place for two years on many U.S. products entering Mexico.”
There were no specific details released yesterday by the Obama administration, but the U.S. government released in early January what it called a “concept document” on how a cross-border trucking program would work.
That document laid out a five-step process for any Mexican carrier wishing to operate inside the U.S. border. Included in that is the understanding that Mexican-based drivers would need to demonstrate proficiency in English, knowledge of U.S. traffic laws, and have documented a “Mexican Commercial Driver’s License ...to demonstrate comparability.”
Also, any Mexican carrier would need to show proof of insurance and its vehicles would have to meet all Federal Motor Vehicle Safety Standards (FMVSS) as well as EPA emissions standards.
According to a spokesperson for the U.S. Chamber of Congress, the Obama administration will brief Congress on the agreement and publish a Federal Register notice to solicit public comment. “They don’t need Congressional authorization [to put the agreement in effect,” he pointed out. “ The legislative concern is that Congress could act again to proactively bar funding for the program, which is what happened in 2009, leading to the [Mexican] tariffs.”
The spokesperson supplied FleetOwner with this description of the agreement it had received from the White House:
“This afternoon President Obama and President Calderon will announce that Mexico and the United States have found a clear path to resolving the cross-border long-haul trucking dispute.
This path 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. It will also result in the lifting of retaliatory tariffs imposed by Mexico. Specifically, Mexico will commit to suspending 50% of the tariffs at the time a final agreement for a new program is signed by both countries. The remaining 50% will be suspended at the time the first Mexican carrier receives authorization under the new phased program. USTR will ensure that as the program is phased-in, Mexico takes action to lift the tariffs.
The new program, subject to final agreement, will emphasize safety, security, efficiency. For instance, all trucks will be required to have electronic on-board recorders that will track compliance with hours-of-service and cabotage laws. Trucks will also be required to comply with all Federal Motor Vehicle Safety Standards. In addition, DOT will review the combined driver record of each driver who wishes to participate and require that all drug testing samples are analyzed by a U.S. laboratory. And, the DOT will require participating drivers to undergo an assessment of their ability to understand English and U.S. traffic laws.
The new program will also include some improvements that are important to Mexico, for example, credit for past participation and a path to full and permanent authority. In addition to these improvements, the new program will advance the economic interests of both the United States and Mexico. It will lift tariffs on more than $2B of U.S. good, increasing U.S. exports to Mexico and expanding jobs on both sides of the border.
This is a very positive development, but it is not a done deal. The negotiating teams for the United States and Mexico continue to work on the details. We expect to have a proposed agreement available for Congressional briefings and public notice and comment by late March/early April. The DOT will respond to all comments it receives and then work with Mexico to finalize an agreement.”
OOIDA’s Spencer believes Mexico bullied the U.S. into the cross-border agreement due to the tariffs.
“Mexico’s economic bullying tactics should not be tolerated,” he said. “The onus is on Mexico to raise the safety, security and environmental standards for their trucking industry. We should not allow ourselves to be harassed into lowering our standards.”
“The Teamsters believe the administration should have brought a challenge against Mexico for imposing excessive tariffs on U.S. goods, as the Teamsters Union has urged for nearly two years instead of agreeing to open the border to unsafe trucks,” Hoffa added.
The two countries first launched a cross-border trucking program in 2007 to meet the free trade requirements established by the North American Free Trade Agreement.