Roads to common ground

| July 15, 2009

Mexican border odThe past, present and future of U.S.- Mexican cross-border trucking

Little else in trucking incites the passion of U.S. truck drivers like the issue of cross-border hauling through the land ports in California, Arizona, New Mexico and Texas. Bring up the Bush administration’s cross-border trucking demonstration project in any truckstop across the land, and you’re sure to get an earful of opinion from either side of the issue. “They should stay on that side of the border, and we should stay on ours,” says F. Chapman, a Georgia owner-operator leased to Fuller Trucking. “You’re only going to take jobs away from Americans by opening the border to Mexican trucks.” It’s a common view, one promoted by a cohort of groups from the Teamsters union to the Owner-Operator Independent Drivers Association.

Kevin Robinson, a Tennessee-based company driver for Falcon Transport who has family in the borderlands in Texas, is decidedly less concerned. “It doesn’t matter,” he says of allowing Mexican long-haul trucks and drivers access to the U.S. interior market. “Somebody’s going to bring [freight], and somebody’s going to take [freight].” Robinson notes the interconnectedness of the U.S. and Mexican economies, with the multiplicity of American corporation-owned assembly facilities south of the border, known as maquiladoras and part of a longstanding Mexican government-sponsored program of incentives for assembly plants in the border areas. Car and truck parts and other goods and raw materials cross southbound; new cars, new trucks and other durable goods come back north, feeding into the economic engine of the entire continent.

Roger Creery, executive director of the Laredo Development Foundation, says the cross-border trucking issue’s practical component is in making international trade moved by truck “a little more seamless,” a definite area of interest for trucking, manufacturing and other businesses on both sides of the border.

But, Creery adds, many people have lost sight of that practicality. “Has this become more of an emotional issue than it is an economic issue?” he asks.

With tempers running hot, the cold reality is that, as low participation in the Bush cross-border demonstration project suggested all along, few companies north or south of the border have the on-hand cash and the will to really do cross-border long-haul. The processes and infrastructure in place today for moving loads across the border is likely to remain relatively unchanged for years to come, whether any cross-border program begins anew or not.

When President Obama signed into law the $411 billion appropriations bill shortly after taking office, he effectively ended the demonstration project, spawning near-instant retaliatory tariffs on a variety of U.S. agricultural and manufactured products worth an estimated $2.4 billion to U.S. exporters. Even more quickly, the parties to the ongoing political back-and-forth over the notion of a U.S.-Mexican border open to international long-haul broke into action.

Philosophical free-traders used the Mexican tariffs to pronounce the U.S. government’s end to the project a travesty of economic justice. “Mexico has been the grown-up in this dispute,” says Dan Griswold, director of the libertarian Cato Institute’s Center for Trade Policy Studies. “They’ve followed the rules and waited patiently for the U.S. to do the right thing. And now their patience has worn out. It’s time for the U.S. to live up to its international commitments and set a good example instead of a bad example.”

Griswold echoes the words of the Mexican ambassador to the United States, who in a March 18 Wall Street Journal editorial pled Mexico’s case for the tariffs by invoking the dispute’s history: “This was never about the safety of American roads or drivers. It was and has been about protectionism, pure and simple. Back in 1995, the U.S. unilaterally blocked the implementation of the North American Free Trade Agreement’s cross-border trucking provisions, just as they were about to enter into force. In response, and after three years of constant engagement, Mexico had no alternative but to request the establishment of an arbitration panel as allowed under NAFTA. A five-member panel, chaired by a Briton and including two U.S. citizens, ruled unanimously in February 2001 that Washington had violated the trucking provisions contained in NAFTA, authorizing Mexico to adopt retaliatory measures.” Which they didn’t in much measure, but presumably retained the right to do, though longtime opponents of the demonstration project continue to call the tariffs themselves illegal.

“The administration should put their foot down on the tariffs,” says Todd Spencer, OOIDA executive vice president. Spencer and his organization, along with many of its member owner-operators, have long been opposed to opening the border to long-haul cross traffic for reasons of safety and the disparate standards and economics of freight movement on either side. Spencer argues the illegality of the tariffs but is quick to address what he calls actions that amount to “economic treason” by pro-big-business interests on this side of the border: “We believe that the seeds of those tariffs didn’t start in Mexico City. They started in our U.S. Capitol with those economic interests who have been wringing their hands about their inability to tap into those lower-cost Mexican drivers for a long time.”

The import tariffs and the procedures for freight entering Mexico from the U.S. seem to bear him out. Trade into Mexico is anything but free, according to Rolando Quintanilla, former Indy racecar driver and president of Quintanilla International, based in Laredo, Texas.

While the customs procedure for northbound goods is fairly free and seamless from a duty perspective, the southbound process is not, he says, involving a complex set of tariffs and classifications that many along the border characterize as cumbersome, at best.

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