Posts Tagged “North American Free Trade Act”
Is the Mexican truck border program falling apart? If so, that would be music 
to the ears of many, if not the majority in the trucking industry. On the other hand, produce shippers and others will not be too happy.
As reported here on August 23rd, a federal audit would be coming soon on the cross-border pilot program involving Mexican based trucking companies being allowed to operate in the USA.
The Federal Motor Carrier Safety Administration estimated that 46 Mexican carriers would participate in the three-year pilot program. The feds were planning to conduct 4,100 inspections during this time. However, only four Mexican trucking companies have participated, involving only four trucks and five drivers. A total of 89 inspections have been conducted by the FMCSA. Ouch!
The controverisal program has created some strange bedfellows in trucking. For example the Owner-Operators Independent Drivers Association (OOIDA) and the International Brotherhood of Teamsters seldom agree on much of anything. However, they’ve tightly held hands fighting this issue based around fears that a flood of Mexican trucks in the USA will drive down freight rates, many of which are not much different from 20 years ago. There also are concerns by owner operators over safety issues with Mexican equipment and lack of training among Mexican drivers.
Meanwhile produce shippers and others favoring Mexican trucking access to USA markets like the idea of greater competition leading to lower freight rates.
If the pilot program falls apart, with few Mexican trucking companies interested in participating, some produce shippers are concerned the Mexican government will re-implement tariffs of everything from apples to pears and potatoes – with some tariffs being as high as 20 percent.
The North American Free Trade Agreement (NAFTA), under which this pilot program is operating, requires the USA to permit cross-border trucking. However, legal challenges over the years by American carrier groups have prevented Mexican trucks from operating north of the border for over 10 years.
Within the next month USA transportation officials anticipate an audit report 
on the trucking pilot program with Mexico. While U.S. produce industry shippers may be anxious because thereport could be negative, they fear it could lead to another round of retaliatory tariffs by Mexico.
At the same time some trucking groups in the USA hope this is exactly what happens. Not necessarily retailitory tariffs by the Mexicans, but they are strongly opposed to Mexican truckers having free access to USA markets with poorly trained drivers and subpar equipment, compared to American standards — not to mentions concerns freights were plummet.
The apple, pear and cherry industries in the Northwest has paid tens of millions of dollars during the three years that Mexico imposed 20% tariffs.
The North American Free Trade Act requires the U.S. to allow cross-border trucking. However, opposition by U.S. trucking unions – including the Teamsters and trade organizations – such as the Owner-Operator Independent Drivers Association, OOIDA, has kept the Mexican trucks out for more than a decade after the act went into effect in 1994. The trucking interests cited safety concerns with Mexican trucking equipment and drivers.
Despite lobbying efforts and some congressional roadblocks, the pilot program finally gained approval from President Obama and his Mexican counterpart Felipe Calderon in July 2011. The first Mexican truck came into the U.S. in October 2011.
However, only six Mexican carriers — each with one truck approved for the program — are participating in the pilot program.
One requirement built into the pilot program is that the DOT be able to document the safety of the Mexican trucks and drivers with “statistically valid” data. Powers said that could be a difficult task because of the low participation numbers.
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