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US, Mexico Sign Cross-Border Trucking Agreement

by Leroy Baker, Tax-News.com, Washington

11 July 2011


On July 6, in Mexico City, the United States Transportation Secretary, Ray LaHood, and the Mexican Communications and Transport Secretary, Dionisio Arturo Pèrez-Jàcome Friscione, signed agreements resolving the dispute over long-haul, cross-border trucking services between the US and Mexico.

The long-running trade dispute prevents Mexican haulage firms from operating their trucks across the US border on safety grounds. It dates back to 2009 when Mexico imposed higher import tariffs on US goods in retaliation for a decision by Congress to end a pilot programme to allow Mexican trucks to operate in the US. Congress decided to cancel this programme due to concerns that Mexican trucks were not meeting more stringent US safety standards, although Mexico insisted that these issues have been addressed.

The resolution of the dispute will allow for the establishment of a reciprocal, phased-in programme built on the highest safety standards that will authorize both Mexican and US long-haul carriers to engage in cross-border operations under the North American Free Trade Agreement.

As a result of meetings this year, and in consultation with Mexico, trucks will now be required to comply with all US federal motor vehicle safety standards and must have electronic monitoring systems to track hours-of-service compliance. The new agreement also ensures that Mexico will provide reciprocal authority for US carriers to engage in cross-border long-haul operations into that country.

Pursuant to an agreement signed by the US Trade Representative and the Mexican Economic Secretary, Mexico will lift retaliatory tariffs on more than USD2bn of US manufactured goods and agricultural products.

The agreement provides that Mexico will suspend 50% of the retaliatory tariffs within ten days, and will suspend the remainder within five days of the first Mexican trucking company receiving its US operating authority. As a result, Mexican tariffs that now range from 5% to 25% on an array of US agricultural and industrial products, such as apples, certain pork products, and personal care products, would be immediately cut in half and will disappear entirely within a few months.

LaHood said: “The agreements signed today are a win for roadway safety and they are a win for trade. By opening the door to long-haul trucking between the US and Mexico, America’s third largest trading partner, we will create jobs and opportunity for our people and support economic development in both nations.”

In a reaction to the dispute’s resolution, the US Chamber of Commerce (USCC) President and CEO Thomas J. Donohue considered that: “If we’re going to boost US exports and create jobs here at home, we must hold on to our major export markets, such as Mexico, where American companies are already doing well. This is a vital step toward a more efficient US-Mexico border, which a recent USCC report found could greatly enhance US competitiveness.”

He urged Congress to support this agreement and finally bring the dispute to an end; a USCC study had found that more than 25,000 US jobs are at risk if action is not taken.

However, a release by the Owner-Operator Independent Drivers Association (OOIDA), maintained that the agreement “will jeopardize the livelihoods of tens of thousands of US-based small-business truckers and professional truck drivers and undermine the standard of living for the rest of the driver community.”

“Every year,” OOIDA added, “US truckers are burdened with new safety, security and environmental regulations. Those regulations come with considerable compliance costs. Mexico-domiciled trucking companies do not contend with a similar regulatory regime, nor with the corresponding costs.”

It also concluded that, with regard to “reciprocal access to the Mexican market, OOIDA knows that most truckers refuse to haul loads into Mexico because of safety concerns, noting that the Department of State issues warnings against doing so on a regular basis.”

TAGS: transport treaty | compliance | tax | business | law | tariffs | Mexico | agreements | United States | import duty | standards | regulation | trade

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