LaHood seeks to thaw U.S.-Mexico truck freeze

In November 1942, sensing the tide of World War II was beginning to turn in favor of the Allies, British Prime Minister Winston Churchill uttered the famous phrase, "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

The same could apply—on a less-grandiose scale—to the latest development in the U.S.-Mexico cross-border trucking dispute. After a two-year fight that has resulted in millions in lost revenues, missed market opportunities, and increasing acrimony between the two nations, the ice may have finally begun to thaw.

The melting process began last Thursday, when Transportation Secretary Ray LaHood unveiled to Congress what was termed a "concept document" that would eventually allow qualified Mexican truckers to operate in U.S. commerce beyond a 25-mile commercial zone along the southern border. (The document can be read here.)

The Department of Transportation (DOT) document was framed as nothing more than a "starting point" for negotiations with Mexico aimed at developing a cross-border access program all stakeholders could live with. If and when an agreement is reached, DOT will make the details public and give interested parties 30 days to file comments. Congress must pass legislation as well, and the deal is unlikely to go down without a fight both at DOT and on Capitol Hill.

The document's release comes nearly two years after President Barack Obama signed an omnibus spending bill that ended funding for a 2007 pilot program that gave Mexican truckers and drivers limited access to U.S. markets. Supporters of the action, namely the Teamsters union and independent truck drivers, hailed the action as an important step in keeping unsafe and unqualified Mexican truckers off U.S. highways. Critics argued that the administration's decision violated a provision in the 1994 North American Free Trade Agreement that required the United States to grant Mexican truckers full access to its highways by January 2000.

A furious Mexican government retaliated by slapping tariffs on 89 U.S. import products worth more than $2 billion a year. Mexico imposed the tariffs using a rotating "carousel" mechanism that lets it remove some products from the list while adding others.

In response to the release of the DOT document, Mexico said it would stop the "carousel" and refrain from adding any more products to the list. However, the government said it would not lift the tariffs until it sees more progress toward resolving the dispute.

The DOT document is patterned loosely after the 2007 pilot program. However, there are three major additions: All vehicles must be equipped with electronic on-board recording devices to monitor compliance with applicable driver hours-of-service regulations. In addition, U.S. regulators will review each driver's performance history in both countries before deeming him or her fit to operate under U.S. standards. Finally, U.S. officials will review safety records maintained by the Mexican government on each company as well as any U.S. operating history the company may have.

DOT said the changes reflect input from multiple stakeholders, including the Mexican government.

Reaction to the document was swift, and the tone generally predictable. Teamster President James P. Hoffa said he was "deeply disappointed" in the proposal, warning it would endanger the U.S. traveling public and expose the U.S. southern border to increased drug trafficking from Mexican cartels.

The Owner-Operator Independent Drivers Association (OOIDA) said the proposal would put U.S. citizens at risk on the roads and jeopardize U.S. driver jobs at a time of elevated unemployment.

"Mexico has been bullying our government into allowing their trucking companies to have full access to highways across the U.S. while refusing to raise regulatory standards in its own trucking industry," said Todd Spencer, OOIDA's executive vice president. "Mexico's regulatory standards aren't even remotely equivalent to what we have in the U.S."

The U.S. Chamber of Commerce applauded the move. "It's time that we complied with the promise we made to allow carefully inspected trucks to move across the border," said Thomas J. Donohue, the chamber's president and CEO and former head of the American Trucking Associations.

For the cluster of producers affected by the Mexican tariffs, the dispute can't end soon enough. The U.S. Apple Association, whose products were added to the tariff list last August, said it was pleased by the turn of events. Like many U.S. commodity producers, the apple industry counts Mexico as its largest export market. Last year, Mexico imported 11.5 million boxes—or bushels—of fresh U.S. apples, worth $207 million. That accounted for more than one-quarter of total U.S. apple exports by value.