On Mexico Trucking Dispute, How Close is Soon?

By May 17, 2010Trade

Mexican President Calderon arrives in Washington on a state visit this week. We expect he will raise an old and a very costly issue – the refusal of the United States to adhere to its obligations under the North American Free Trade Agreement and permit cross-border trucking. American manufacturers and farmers are facing retaliatory duties on $2.4 billion worth of products as a result of the termination of a pilot program that allowed Mexican trucks access to the United States, as we agreed to do in 1993 when NAFTA was signed.

The tariffs have been in place for 13 months. The Administration has been promising a fix for almost as long. American manufacturers continue to lose market share, pay higher duties and take a hit on their bottom line. Tens of thousands of jobs are at risk if policy is not changed and thousands have already been lost.

Recent press accounts have been filled with a sense of hope that the Obama Administration is “close” to announcing a proposal to resolve the issue – that we will “soon” see a plan. But we’ve heard this before.

The current hope for a resolution springs from comments at a May 6 Senate Transportation, Housing and Urban Development Appropriations Subcommittee hearing. Sen. Patty Murray (D-WA) urged Transportation Secretary Ray LaHood to resolve the trucking dispute with Mexico during the state visit of President Calderon.

The Senator’s questions focused on the agricultural aspects of the trade dispute, and while we certainly sympathize with Washington state farmers, the Mexican tariffs are hurting manufacturers across the country, in all 50 states – about two-thirds of the $2.4 billion in exports subjected to tariff retaliation are manufactured goods.

Here’s the start of her question (from her web site, where you can listen to the Q&A as well):

Mr. Secretary, I want to ask one last question about an issue I brought up with you the last time you were before this subcommittee: cross-border trucking with Mexico and the devastating effect of Mexican tariffs on Washington state farmers.

Back in March, I urged you and the administration to move quickly to craft a plan to resume cross-border trucking with Mexico in a way that would address the safety concerns raised during the pilot and end the tariffs imposed by the Mexican government.

You told this subcommittee that a resolution would be forthcoming “soon.”

According to press accounts, LaHood said the DOT, cabinet members and Obama’s administration had “worked very hard to put a proposal together we will be announcing it very soon.”

He said, in response to the Senator: “We will come to Capitol Hill and brief every senator that has an interest in what it says; get feedback. Our intention is, President Obama’s administration’s intent is to restart this program. It’s part of NAFTA. It needs to be restarted. We believe if it is restarted these tariffs will be lifted.”

The secretary said they are “very close to briefing you and other senators” when Murray interrupted him.

“Very close,” she asked. “Sooner than soon?”

“It is closer than soon,” LaHood responded.

Let’s look back to March 2010 and another exchange between Sen. Murray and Sec. LaHood. Similar set-up by the Senator (question is edited for space):

Last year, you discussed the work you were doing with the various Departments to craft a plan to resume cross- border trucking with Mexico in a way that would address the safety concerns raised during the pilot and end the tariffs imposed by the Mexican government.

Can you please update us the discussions within the Administration and with Mexico and give us a sense of when we might see a plan?

The Secretary’s response:

We are finalizing a plan, the reason it’s taken so long is because there’s a lot of different moving parts, including about five different cabinet officials and every time we make a tweak or a change everybody has to sign-off on it, but we’re 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’re close to talking to all of you about what we think our way of addressing the safety concerns that congress brought to us.”

So. Finalizing a plan. We’re very close. It’s going to happen soon.

It’s too bad that after 14 months of retaliatory tariffs on American manufactured exports to Mexico, we’re not any closer to resolving the issue.

American manufacturers could use a resolution to this problem as “soon” as possible to aide in economic recovery and prevent the further loss of jobs.

Leave a Reply