Roads to common ground

| July 15, 2009

Cross-Border Timeline
Sept. 1982 – U.S. President Ronald Reagan signs Bus Regulatory Reform Act of 1982, which put a moratorium on all international carriers operating in the United States but which also immediately lifted the moratorium on Canadian carriers.

Dec. 1992 – North American Free Trade Agreement signed by presidents of the United States, Canada and Mexico.

Jan. 1994 – NAFTA takes effect, mandating lifting of the moratoriums on Mexican and U.S. carriers engaging in cross-border long-haul operations on the U.S. southern border by Dec. 18, 1995.

Dec. 1995 – U.S. President Bill Clinton signs the ICC Termination Act of 1995, extending the moratorium on Mexican carriers operating in cross-border long-haul in the United States.

Feb. 2001 – NAFTA arbitration panel finds United States in violation of NAFTA’s trucking provisions, authorizing Mexico to take retaliatory measures in the form of tariffs.

March 2002 – Safety requirements beyond those applied to Canadian carriers are adopted by U.S. Congress relative to Mexican carriers applying for long-haul authority in the U.S.

Sept. 2007 – After considerable preparation, negotiation and controversy, first truck crosses the border under the authority of the U.S.-Mexican cross-border demonstration project, which eventually included 26 Mexican and 10 U.S. carriers.

March 2009 – U.S. President Barack Obama signs the fiscal-year 2009 omnibus spending bill, effectively ending the demonstration program, to which Mexico responds with tariffs on a basket of U.S. goods worth $2.4 billion to U.S. exporters yearly.

Cross-border project still alive on the Mexican side of the border

Cross-border demonstration project participant Plastic Express, based in City of Industry, Calif., is no newbie to hauling in Mexico. They’ve “been delivering bulk plastic resin across the border into Tijuana and Mexicali since the early 1980s,” says Tom McKellar, company general manager for operations, “through an arrangement with the Mexican state of Baja California.” The nature of the material hauled – “it doesn’t do well when being transferred,” McKellar says – necessitates special handling.

McKellar says the cross-border program represented to Plastic Express an attractive way of expanding into Sonora and other Mexican states.

“The program is ongoing in Mexico,” he says, adding that the expense of operating there has been minimal compared to what he’s used to in the U.S., estimating licensing fees to be around $500 per tractor-trailer versus $3,000 or so in the U.S., not including Federal Highway Use Tax.

For insurance, things get even easier. “It might cost around $10,000 a year to protect yourself with a $10 million policy in the U.S.,” he says. In Mexico, the operative figure for equivalent coverage would be $1,000. “The litigious nature of the U.S. makes it this way,” he adds.

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