The United States and Mexico have signed a cross-border trucking agreement that means the United States will open its roads to Mexican trucks while Mexico will suspend about $2 billion in tariffs on US goods.
As part of the agreement, signed by US Trade Representative Ron Kirk and his Mexican counterpart in Mexico City, Mexico will suspend 50% of its tariffs within 10 days. Mexico will suspend the rest of the tariffs within five days of its first trucking company receiving US operating authority. The two nations said they would issue their first trucking permits in August.
Mexico had set retaliatory tariffs on US goods for not allowing its trucks access to US roadways, after the Obama administration suspended a previous pilot program shortly after President Obama took office in early 2009.
Under the Bush administration, the Federal Motor Carrier Safety Administration had run a pilot cross-border trucking program under provisions of the North American Free Trade Agreement (NAFTA). The new agreement would end trucking-related NAFTA disputes between the two nations.
Reaction to the agreement was mixed.
It “seems like the [Obama] administration is dead set on caving to Mexico’s shakedown regardless of the costs to the American public and our tax coffers,” said Owner-Operator Independent Drivers Association (OOIDA) President Jim Johnston. “Why not let the public see the details before signing the agreement?”
OOIDA said it has “adamantly opposed opening the border because Mexico has failed to institute regulations and enforcement programs that are even remotely similar to those in the United States and because there would be no relevant corresponding reciprocity for US truckers.”
However, the US Department of Transportation (DOT) said the agreement would ensure safety, that Mexican trucks will be required to comply with US safety standards, and that they must have electronic monitoring systems to track hours-of-service compliance.
Julie Manes, United Fresh Produce Association director of government relations, released this statement:
“This accord is fantastic news for the produce industry, and we are excited to see more trade with Mexico, which provides such a valuable market for American produce. United Fresh recognizes and applauds the work of the Department of Transportation and the office of the US trade representative for their dedication in pursuing a workable, expedited solution to this standoff that has lingered for too long. As part of the Alliance to Keep US Jobs, we’ve worked hand in hand with our partners in the industry and in Washington to provide feedback and inside on this issue, and we are very happy that the end is close in sight.”
Bill Graves, American Trucking Associations (ATA) president and chief executive officer, issued this statement:
“American Trucking Associations welcomes this latest step in improving the efficiency of trucking and trade at our southern border. By signing this historic agreement, the US and Mexico have laid the groundwork for continued economic growth on both sides of the border.
“Further, ATA is encouraged that Mexico will soon be dropping its incredibly damaging tariffs, which will also spur growth in trade between our two countries.
“We also note that Mexican fleets participating in the program will be bound by the same rules and regulations applicable to American carriers, and we are pleased that the agreement allows for US carriers to compete in Mexico”.
Kraig R Naasz, American Frozen Food Institute (AFFI) president and CEO, issued this statement:
“Today’s signing will bring immediate relief to US frozen food producers who have been hit hard by punitive Mexican retaliatory tariffs.
“AFFI has long endeavored to help find a solution to the US-Mexico trucking dispute that has inflicted heavy economic losses on US exporters of frozen potato products, frozen sweet corn, and frozen ham.
“The memorandum ensures the United States will be in full compliance with its international trade commitments and will immediately help restore some of the lost jobs and lost market access US frozen food producers have suffered.”
Mexico imposed a 20% tariff on US frozen potato products in 2009 after the United States canceled a cross-border trucking pilot program, costing US frozen potato product exporters more than $33 million in lost revenue. Though that tariff was reduced to 5% in August 2010, Mexico expanded its tariff retaliation list to include imports of US frozen sweet corn and frozen ham.
