Today’s Federal Register contains the Department of Transportation’s proposal for re-opening cross-border trucking with Mexico (Pilot Program on NAFTA Long-Haul Trucking Provisions). Once this plan is finalized, the retaliatory tariffs on $2.5 billion worth of U.S. manufactured goods and agricultural products will be cut in half. Those tariffs will be suspended completely once the first Mexican carrier is certified under the agreement.
This is a very welcome development and one that is overdue. For two years American manufacturers of a wide range of products have been paying 15-25 percent more than our competitors in Mexico, losing market share to manufacturers in China, Brazil, Canada, Japan, and other countries. These tariffs were put in place because the United States would not uphold its commitments made under North American Free Trade Agreement. The agreement published today will rectify this.
The National Association of Manufacturers has led efforts to repeal the ban on cross-border trucking for more than two years. The loss of exports to our second largest trading partner as a result of the tariff retaliation by Mexico forced manufacturers in America to cut production and lay off workers. Some may never recover their market share losses in Mexico.
This trade dispute did not need to happen. We are very pleased to see the end in sight as represented by today’s Federal Register notice. We urge the Obama Administration to sign the agreement after the 30-day comment period and move expeditiously to certify the Mexican carriers, and end the tariff retaliation.
Doug Goudie is director, international trade policy, for the NAM.