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Politicians demand action on U.S.-Mexico cross-border trucking program, says report
Friday, 05 March 2010 00:00

WASHINGTON—Nearly nine months after The White House indicated that it was making progress on the cross-border trucking program between the United States and Mexico, a group of 56 members of Congress this week penned a letter to United States Trade Representative Ron Kirk and Department of Transportation Secretary Ray LaHood, requesting that this situation be addressed and resolved, according to a Reuters report.

"The current situation is unsustainable and untenable," the letter read. "Our constituents need help immediately and we implore you to work quickly to implement a solution that ensures safety and normalizes trade. Please communicate your plans for a solution so we are better able to understand the administration's strategy."

As LM has previously reported, the U.S.-Mexico cross-border trucking program has seen more than a few bumps in the road in recent years. In 2009, the pilot program for cross-border trucking was eliminated as part of the White House's $410 billion Omnibus Appropriations Act, H.R. 4105. Even through this program-killing measure was approved, that Obama administration said it would work to create a new cross-border, long distance trucking program between the U.S. and Mexico.

The historic objections over this program from U.S. politicians have centered around how Mexican truckers face less regulation than American Carriers and would post a hazard on U.S. roads.

Under the North American Free Trade Agreement (NAFTA) passed in 1993, the U.S. is required to open its border to Mexican and Canadian carriers who meet U.S. trucking standards. The Canadian border is open; the Mexican border is not.

Soon after the program was eliminated, the Mexican government said it would place tariffs on roughly 90 American agricultural and manufactured exports as payback for the U.S. decision to shutter the program.

These tariffs amount to $2.4 billion of American goods, ranging from fruit juices to pet food to deodorant, among others, ranging from 10 percent to 45 percent, with affected products coming from 40 states, stated a 2009 Los Angeles Times report, which added that these products represent less than two percent of U.S. exports to Mexico.

In June 2009, a group of roughly 4,500 Mexican truckers indicated they planned to sue the United States for $6 billion, due to the United States Congress's decision to shut down the cross-border trucking pilot program between the U.S. and Mexico. The Mexican trucking companies are represented by Mexico's National Cargo Transportation Association, also known as Canacar.

While these problems still exist, the White House has indicated at various points in the last year, that this issue will be addressed and a solution is coming, with LaHood stating in March 2009 that a new program was in the works and that he was actively lobbying up to 30 former colleagues in the House of Representatives to craft a U.S.-Mexico cross-border trucking program that satisfies the United States' commitment to the North American Free Trade Act as well as highway safety.

Fast forward nearly nine months later and it looks like not much has changed in regards to this situation, although LaHood said during a Senate Committee of Appropriations Transportation Housing and Urban Development subcommittee hearing on the Fiscal Year 2011 Budget for the Department of Transportation this week that progress is, in fact, being made on the cross-border trucking program.

During the hearing, Senator Patty Murray (D-Wash.) said if things do not change, her state will eventually lose jobs to Canada. And while there are concerns about cross-border trucking, Murray said the U.S. clearly needs to work with Mexico to address this impasse and move forward and then asked LaHood what the current plan is for cross-border trucking.

"We are finalizing a plan," LaHood told Murray. "The reason it is taking so long is that there a lot of moving parts. But we are very near a proposal that we think will meet all of the safety concerns that I heard when I talked to 25 members of Congress...we are close to talking to all of you about our way of addressing the safety concerns Congress brought to us."

In an August 2009 interview, Michael A. Regan, CEO of transportation rate analysis firm TranzAct Technologies, told LM this situation centers around the need for government to make a firm decision one way or the other.

"That is the main issue," said Regan. "Also, the unions have fought this because of the perception that it is going to impinge on their ability to employ their members. There is also the alliance between the unions and OOIDA (Owner-Operator Independent Driver's Association) that don't want the competition...so they go in with the guise of potential safety issues."

And making matters worse is that there is more truck capacity at the moment than there has ever been before, noted Regan. With tonnage and demand levels far below previous levels, the situation is exacerbated.

Logistics Management, 3/5/2010