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Wednesday, July 6, 2011

Landmark US-Mexico trucking agreement resolves 15-year conflict.

U.S. truckers shocked by agreement with Mexico
After years of wrangling, US and Mexican officials signed an agreement Wednesday that allows trucks from each nation to travel on the other country’s highways – a key provision of NAFTA.


Trucks barrel down Interstate 95 during the morning rush hour in this 
2002 file photo. US and Mexican governments, will allow cross-border 
trucking for the first time in 15 years – if Congress signs off.
A new agreement, signed Wednesday by representatives of the 
John Nordell / The Christian Science Monitor / File


By Howard LaFranchi, Staff writer / July 6, 2011
 

Washington: The United States and Mexico on Wednesday signed an agreement aimed at resolving a cross-border trucking dispute. The longstanding disagreement had come to symbolize growing resistance, especially in the US Congress, to free-trade provisions with America’s southern neighbor.


The accord, signed in Mexico City by US and Mexican transportation officials, would end a 15-year-old controversy that on the US side featured fears of unsafe Mexican trucks barreling along US highways, driven by unprofessional Mexican truckers.
On the Mexican side, outrage over the American disregard for a NAFTA provision led to retaliatory tariffs on US goods ranging from pork to consumer care products – which cost the US as much as $2 billion in exports.
The accord was greeted warmly by US trade, farm, and business organizations – but condemned by US trucking organizations, a sign the agreement could face trouble in Congress.

Under the agreement, the US will reinstate a pilot program for Mexican truck certification that was introduced under the Bush administration – and defunded by an angry Congress in 2009. Mexico, in turn, will immediately drop half of the tariffs on about 100 US products, with the rest to be removed when Mexican trucks actually start rolling across the border.
“The agreements signed today are a win for roadway safety and they are a win for trade,” said US Transportation Secretary Ray LaHood after signing the documents.
The accord requires all Mexican trucks operating in the US to comply with US safety standards, and it mandates the installation of monitoring devices to track truck usage and compliance with service requirements.
Recognizing the potential for a negative response from Congress, some supporters of Wednesday’s agreement wasted little time with praise and got right on to warnings against attempts to once again sidetrack the resolution.
“We are encouraged there is finally a positive end in sight,” said Bill Reinsch, president of theNational Foreign Trade Council in Washington. But he added, “We urge Congress to refrain from any action that would derail the program or fall short of our commitments under NAFTA.”
Some, who oppose any trucking accord allowing Mexican trucks to come north, continue to hammer at safety concerns.
“Opening the border to dangerous trucks at a time of high unemployment and rampant drug violence is a shameful abandonment of the Department of Transportation’s duty to protect American citizens from harm and to spend American tax dollars responsibly,” said Jim Hoffa, general president of the Teamsters, in a statement. He said the accord “endangers American motorists.”
Mexican trucks are already allowed to circulate in the US within 25 miles of the border. The new agreement will allow Mexican trucks to deliver goods into the US and to return goods to Mexico, but it bars the transport of goods between US destinations.
Both sides in the debate over Mexican trucks are latching onto the issue of the day – jobs – to make their case for or against the agreement.
Secretary LaHood said that by “opening the door to long-haul trucking between the US and Mexico … we will create jobs and opportunity for our people and support economic development in both nations.”
Farmers are particularly happy: Mexico is the second-largest purchaser of US pork after Japan, for example, but pork sales to Mexico have sagged in recent years under the retaliatory tariffs.
But the Teamsters’ Mr. Hoffa says the deal will be a job killer. “The so-called pilot program [for certifying Mexican trucks] is a concession to multinational corporations that send jobs to Mexico,” he said. “It lowers wages and robs jobs from hard-working American truck drivers and warehouse workers.”
The opposing arguments reveal the trucking dispute to be a microcosm of the larger debate in the US over trade. How Congress responds may suggest which way the trade winds are blowing.
Owner-Operator Independent Drivers Association
1 NW OOIDA Drive, Grain Valley, MO  64029
Web site: www.ooida.com
Facebook - OOIDA
Contact: Norita Taylor, norita_taylor@ooida.com  Headquarters: (816) 229-5791
For Immediate Release
U.S. truckers shocked by agreement with Mexico
U.S. jobs and tax dollars in jeopardy
(Grain Valley, Mo., July 6, 2011) – Small-business truckers and professional truck drivers, represented by the Owner-Operator Independent Drivers Association (OOIDA), are fuming about a move made today by the government. U.S. Transportation Secretary Ray LaHood is signing a cross-border trucking agreement with Mexico without providing the public or Congress with the final details of the agreement.
“If the agreement is good for the U.S. why the hell is he (Secretary LaHood) sneaking down there to sign it?” said Jim Johnston, President of OOIDA. “So much for their supposed transparency. Why not let the public see the details before signing the agreement?  Seems like the Administration is dead set on caving to Mexico’s shakedown regardless of the costs to the American public and our tax coffers.”
The Association 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 U.S. truckers.
 “People in Washington are constantly talking about two things these days ­­­­­­­­­­– creating good jobs for Americans and cutting wasteful spending.  This program does exactly the opposite for both,” said Todd Spencer, Executive Vice President of OOIDA. “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.”
Every year, U.S. truckers are burdened with new safety, security and environmental regulations. Those regulations come with considerable compliance costs. Mexico-domiciled trucking companies do not contend with a similar regulatory regime nor with the corresponding costs.
“U.S. taxpayers have already seen too much of their money wasted as our government has attempted to accommodate trucking companies from Mexico.  Yet Mexico has done nothing to raise their trucking industry’s standards or address safety and security issues associated with their trucks crossing into the U.S.” said Spencer.
As far as reciprocal access to the Mexican market, the Association knows that most truckers refuse to haul loads into Mexico because of safety concerns, noting that the Department of State issues warnings against doing so on a regular basis.
OOIDA remains unconvinced that U.S. taxpayers will benefit from supposed efficiencies that proponents of the Obama-Calderon agreement are suggesting will accompany the new program.
A report issued by the Congressional Research Service in February of 2010 stated:
“The rationale of eliminating the truck drayage segment at the border, and of NAFTA in general, is to reduce the cost of trade between the two countries, thus raising each nation’s economic welfare  However the cost to federal taxpayers of ensuring Mexican truck safety, estimated by the U.S. DOT to be over $500 million as of March 2008*, appears to be disproportionate to the amount of dollars saved thus far by U.S. importers or exporters that have been able to utilize long-haul trucking authority. . . . Any accumulated savings in trucking costs enjoyed by shippers therefore should be weighed against the public cost of funding the safety inspection regime for Mexican long-haul carriers.”
*The amount cited by the U.S. DOT does not include money spent by other federal and state government entities for drug interdiction, homeland security or immigration enforcement.
OOIDA also notes that trade with Mexico is already healthy and rising without the new trucking program in place.  According to the most recent data from the U.S. Department of Transportation’s Bureau of Transportation Statistics, surface transportation with Mexico totaled $32.1 billion in March 2011, up 15.3% compared to March 2010.  In fact, truck-borne trade with Mexico was up 22% in March compared with February 2011 and up 15% compared with March of 2010.
Adding insult to injury is the fact that U.S. taxpayer dollars will be used to fund the program including the purchase and installation of electronic monitoring devices for Mexican trucking companies participating in the program. Funding for those devices will come from taxes paid by U.S. truckers and citizens into the Highway Trust Fund, a fund that already is teetering on insolvency.
“How many more taxpayer dollars should we spend on efforts that at best won’t help us and in all likelihood will actually hurt us?” asked Spencer.
The Owner-Operator Independent Drivers Association is the largest national trade association representing the interests of small-business trucking professionals and professional truck drivers. The Association currently has more than 151,000 members nationwide. OOIDA was established in 1973 and is headquartered in the Greater Kansas City, Mo., area.

http://www.ooida.com/MediaCenter/Press_Releases/2011/070611.shtml

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