Border Wars

| April 14, 2009

Abruptly ending trucking program leaves U.S. vulnerable to retaliation


The Bush administration’s controversial cross-border demonstration project looks as though it will likely come to an end in the near future. Sen. Byron Dorgan (D-N.D.) added strong language in a $410 billion omnibus spending bill to kill the year-and-a-half-old program.

Never popular with most American truckers or labor unions, the project was supposed to help determine if a seamless flow of goods across the U.S.-Mexico border was feasible. Critics of the program cited unsafe Mexican trucks and the loss of American jobs among reasons for opposing the project. Proponents trumpeted cost savings on imported goods, job creation and potential to increase trade.

Due to the controversy generated by the program, participation was limited to a few carriers on both sides of the border. In the end (even though statistics show no major safety worries about project participants) we still don’t know much more about the feasibility of an open border. Good riddance to a lame program, and good-bye to Mexican drivers operating in the United States? Well, it’s not quite that simple.

First, the cross-border program has served a purpose. It temporarily silenced years of rhetoric about the U.S. not honoring its NAFTA commitments. Now killing it could be a costly move because the U.S. is opening itself up to potential lawsuits and tariffs levied by Mexico if the country decides to retaliate in the name of NAFTA obligations.

If the U.S. had wanted a face-saving out, it could have justified stopping the program because of safety concerns for U.S. carriers hauling into Mexico, which has become a battleground for warring drug cartels. On those grounds, we would have had the upper hand.

And as far as stopping all Mexican drivers from legally operating outside the commercial border zone, that’s a myth. A large number of Mexican carriers’ authority to operate here was grandfathered in when the border was “closed” years ago. Mexican carriers also have the right to use the United States as a “land bridge” for Canada-destined cargo originating in Mexico as long as they meet all U.S. requirements for trucking.

And then there are other provisions of NAFTA. Some of the Mexican participants in the program likely will continue to operate in the United States as they did before the program because they meet the requirements of this provision.

Take Transportes Olympic, the first Mexico-domiciled carrier under the cross-border program to be granted authority to operate outside the 25-mile commercial border zone. This company, whose owner also operates Olympic Transport in McAllen, Texas, has been hauling from Mexico to points all over the United States for years. A provision of NAFTA allows a Mexican-domiciled trucking company that also owns trucking companies in the United States to lease trucks back and forth. It’s a paperwork game handled at the U.S.-Mexico ports of entry.

For example, a Transportes Olympic truck arrives at the U.S. border, and a declaration of lease of truck and driver to Olympic Transport is granted. The driver, usually a Mexican citizen, leaves the border under the authority of the American company and completes his load in the United States.

To be fair, participants of the pilot program, as a recent government report pointed out, are probably not a true representation of the general Mexican long-haul industry. (Out-of-service rates for Mexican participants were far better than nationwide U.S rates.) But there is nothing to say that the United States couldn’t have continued to hold Mexican carriers to the high safety standards of the pilot program.

So thorough and frequent were the inspections in the pilot program that one Mexican carrier – which continued hauling only inside the commercial border zone during its pilot program participation – withdrew from the program and went back to hauling as it had before. It cited disruptions in its business as the reason for withdrawing.

The program can’t really be viewed a success but neither can it been seen as failure. Instead it’s just another sideways step along the long, tired, political road we’ve traveled for years.

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