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U.S. Bars Mexican Trucks

U.S. Bars Mexican Trucks
by Christa Thomas

The U.S. has eliminated a pilot trucking program that permitted Mexican trucks to transport goods into the U.S. Mexico retaliated by placing tariffs on $2.4 billion of U.S. goods exported to Mexico annually.

The U.S. and Mexico agreed under the North American Free Trade Agreement to allow drivers of one country to drop off cargo in the other country and to pick up a load to return home. The pilot program was an effort by the U.S. government to come into compliance with NAFTA. Under the pilot program certain Mexican trucks, screened by U.S. personnel, could operate in the United States.

U.S. interests, most notably the Teamsters union, have vehemently resisted access by Mexican trucks. Though they claim safety concerns, it probably boils down to a turf war. During the pilot program, trucks from Mexico compiled a safety record comparable to that of American rigs.

Without the program, shippers have to stop at the border, pay a transfer service to take the trailer across the border, and then an American trucking company picks up the trailer for the U.S. portion of the journey. This process is time consuming and increases costs.

When the U.S. recently canceled the program, the Mexican government retaliated by imposing tariffs on $2.4 billion of U.S. products that are exported to Mexico. Mexico will apply tariffs of 10 to 45 percent on at least 90 products from the U.S. According to the U.S. National Association of Manufacturers (NAM), almost 85 percent of these products are manufactured goods, including everything from wine and sunglasses to toilet paper.

NAM issued the following statement: “Mexico is our second largest export market, and hundreds of thousands of U.S. jobs depend on those export sales. This comes at a time when U.S. industry can least afford lost sales and competitiveness in important global markets. This is the worst possible time to send a signal to our closest trading partners that the United States does not take its commitments seriously.”

With European borders opening wider every day, it doesn’t make economic sense to not give U.S. and Mexican trucks reciprocal access to each other's markets. Especially at this time, when both the U.S. and Mexican economies need all the help they can get.

Hopefully the U.S. will soon realize its error and comply with the terms of NAFTA.

Source: Bloomberg, Mexico’s State Gazette, www.nam.org