Bloomberg News

U.S. Signs Mexico Pact to Resolve 15-Year Trucking Dispute

July 06, 2011

(Adds trade groups’ comments from 10th paragraph.)

July 6 (Bloomberg) -- The U.S. and Mexican governments reached an accord today to resolve a more than 15-year cross- border trucking dispute that will lift punitive tariffs on about $2.4 billion of U.S. goods.

Under the agreements signed today in Mexico City by U.S. Transportation Secretary Ray LaHood and Mexican Communications and Transportation Minister Dionisio Perez-Jacome, Mexico will suspend half of the tariffs within 10 days. The rest will be eliminated when the first Mexican trucking company is allowed to deliver goods into the U.S. The tariffs range between 5 percent and 25 percent.

“The agreements signed today are a win for roadway safety and they are a win for trade,” LaHood said in a statement.

The conflict dates back to December 1995 when the U.S. cited safety concerns to block North American Free Trade Agreement rules permitting Mexican trucks to cross beyond a 25- mile border zone. Since NAFTA took effect in 1994, total trade between the two countries has jumped more than fourfold to $384 billion in 2010, according to Mexico’s statistics agency.

Mexican trucks must comply with all Federal Motor Vehicle Safety Standards and have monitoring systems to track hours on the road, the Transportation Department said. Also, truck drivers must take drug tests that are analyzed in the U.S., hand over complete driving records and prove their English-language skills.

Provisional Permit

Mexican trucks will be allowed to carry loads to a U.S. destination and bring cargo back to Mexico. They won’t be able to deliver goods between two U.S. cities. U.S. trucks will be allowed to circulate in Mexico under the same guidelines.

Trucking companies can obtain an 18-month provisional permit to operate in the U.S. that will become permanent if they pass two inspections to ensure they meet safety requirements, according to a Mexican transportation ministry statement. The request for permits begins tomorrow and the first ones may be awarded in August, the statement said.

“The agreement reached by both governments provides transportation-operating rules that give legal certainty to the participants and their investments,” the statement said.

U.S. independent truckers have opposed a cross-border trucking agreement because of safety concerns and the lower wages paid to Mexican truckers.

U.S. Truckers’ Lawsuit

“This program will jeopardize the livelihoods of tens of thousands of U.S.-based small-business truckers and professional truck drivers and undermine the standard of living for the rest of the driver community,” Todd Spencer, executive vice president of the Grain Valley, Missouri-based Owner-Operator Independent Drivers Association, said in a statement.

The trade group, known as OOIDA, filed a petition today in the U.S. Court of Appeals for the District of Columbia requesting a review of the program.

The U.S. Chamber of Commerce praised the accord as a step toward fully lifting the punitive tariffs and boosting U.S. exports to Mexico. The Chamber said an internal study showed 25,000 jobs are at risk if the trucking spate isn’t ended.

“This is a vital step toward a more efficient U.S.-Mexico border,” Thomas J. Donohue, president and chief executive officer of the Chamber, said in a statement. “We urge Congress to support this agreement and let this dispute be brought to an end.”

Now, because of the trucking limitations, truckers drop trailers at the border before crossing. Older rigs, often called transfers, pick them up to cross and leave them for a long-haul truck waiting on the other side.

A previous attempt to resolve the problem failed after the U.S. canceled a cross-border trucking certification program in March 2009. Only 157 Mexican trucks took part in that pilot program. The U.S. announced in January it would hold talks with Mexico to resolve the dispute.

--With assistance from Jeff Plungis in Washington. Editors: Niamh Ring, Romaine Bostick

To contact the reporter on this story: Thomas Black in Dallas at tblack@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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