Agreement ends cross-border trucking dispute

by Jay Sjerven
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U.S. Transportation Sec-retary Ray LaHood and Mexican Secretary of Communications and Trans-portation Dionisio Arturo Pèrez- Jàcome Friscione on July 6 signed agreements aimed at resolving the 16-year dispute over long-haul, cross-border trucking services between the United States and Mexico.

Under the agreement, Mexico will lift retaliatory tariffs on more than $2 billion in U.S. manufactured goods and agricultural products. Those tariffs, which ranged between 5% and 25% on 99 selected products, including food and beverage products, were put in place in 2009, when the U.S. Congress refused to appropriate funds to continue a pilot program established in 2007 that allowed a limited number of Mexican trucks to operate in the United States.

The tariffs will be reduced by 50% within 10 days of the agreement, and the remaining tariffs will be removed within five days of the first Mexican trucking company receiving authorization to operate in the United States under the agreement.

In exchange for Mexico lifting the retaliatory tariffs, the United States government will establish a new pilot program that will allow Mexican trucking companies to obtain 18-month provisional permits allowing them to carry loads across the border to U.S. destinations and bring cargo back to Mexico. The trucks will not be allowed to deliver goods between U.S. cities. Currently, Mexican trucks must drop their trailers within a 25-mile border zone, and U.S.-based trucks attach and then haul the trailers for delivery to points in the United States.

Under the new program, Mexican trucks will have to comply with all U.S. federal motor vehicle safety standards and have monitoring systems to track drivers’ hours on the road. Drivers also will be required to take drug tests that will be analyzed in the United States and demonstrate English language skills.

If participating Mexican trucking companies pass inspections ensuring they meet the safety requirements during the spans of their 18-month provisional permits, their permits to operate in the United States may be made permanent.

“For U.S. farmers and ranchers, the lifting of these tariffs means jobs and fiscal relief, lifting constraints on American products, removing barriers to trade with a key trading partner, and putting Americans back to work at a time when U.S. agriculture is setting record export figures,” said Secretary of Agriculture Tom Vilsack. “Mexico is U.S. agriculture’s third-ranked trading partner, buying $14.5 billion of U.S. farm goods last year. Already in 2011, exports to Mexico are up nearly 25%. Today’s agreement will allow America’s farmers and ranchers to continue to lead the way to America’s economic recovery.”

U.S. agricultural producers and most business groups praised the agreement, but the Teamsters union, U.S. independent truck owner-operators and their allies in Congress said they would challenge the agreement.

“This dispute has had a profound impact on the fresh produce industry in particular,” said Bryan Silbermann, president and chief executive officer of the Produce Marketing Association, Newark, Del. The United States exports table grapes, apples, and several other types of fruits and vegetables to Mexico, and many of those exports have been subject to the retaliatory tariffs. “Mexico is a critical trading partner for our members, and the resolution of this issue not only allows for greater export opportunities, but also impacts job creation and demand for produce in both countries.”

J. Patrick Boyle, president and c.e.o., American Meat Institute, said, “Mexico has emerged as a vital trading partner for the U.S. meat and poultry industry, and this pilot program will allow U.S. pork producers and producers of other products affected by the retaliatory tariffs to regain their competitive positions and market shares in Mexico and recover jobs lost because of the decline in exports.”

But on the same day the agreement was announced, Representative Peter DeFazio of Oregon, ranking member of the House Committee on Trans-portation and Infrastructure’s subcommittee on highways and transit, on behalf of himself and Representatives Bruce Braley of Iowa, Duncan Hunter of California, Daniel Lipinski of Illinois, Grace Napolitano of California and Bob Filner of California, introduced H.R. 2407, the Protecting America’s Road Act, which would limit the scope of the program to three years.

“We are pleased to see that congressmen have moved swiftly to interject some sanity into this blatant maneuver to perm-anently open the border to long-haul trucks from Mexico,” said Todd Spencer, executive vice-president, Owner-Operator Independent Drivers Association. “There is absolutely no justi-fication to grant permanent operating authority beyond the

scope of a pilot program. Grant-ing permanent authority is clear-ly nothing more than an attempt to placate Mexico and sell out U.S. security, safety and trucking jobs.”

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