After more than twenty years of false starts and delays, the NAFTA trucking dispute has been resolved.
In the article lead for an opinion piece that was recently printed in Mexico’s daily Universal, and authored by one of the country’s former free trade agreement negotiators, Luis de la Calle, the author begins with the Spanish phrase “Más vale tarde que nunca.” Translated into English the words mean “Better late than never.” What de la Calle was referring to with this comment was last Friday’s (January 9, 2015) announcement by the US Department of Transportation (DOT)that it will now process all of the pending applications from Mexican land transportation firms requesting permission to provide freight transportation service within the length and breadth of US territory. This signifies, in concrete terms, that the decades long NAFTA trucking dispute has been resolved.
The history of this longstanding NAFTA trade impasse between the United States and Mexico, in addition to being a lengthy one, has been unique as regards the details surrounding it. In the article that he penned for El Universal, de la Calle, who today is a director at the Mexico City-based public affairs consulting firm De la Calle, Madrazo, Mancera, points out one of its ironies. Initially the including of cross border trucking provisions in the NAFTA was supported and encouraged by the members of the American Trucking Association. It was Mexican transportation interest groups that were against opening their borders to competition from American firms. On January 15, 1995, two days before the preliminary measure of opening up the entire length of the border region to trucking companies from both nations, the US Trade Representative, at the time, Mickey Cantor, alleged that Mexican companies did not comply with the terms of the agreement. According to de la Calle, this occurred as a result of pressure brought to bear by US economic interest groups, mainly the Teamsters, and led to an “indefinite” postponement of the NAFTA’s transportation provisions.
As a response to the Obama’s cessation of a pilot US-Mexico trucking program that had been initiated during the last year of the Bush administration, Mexico retaliated against the United States for violating the transportation agreement in the NAFTA by imposing ninety tariffs of between ten and forty-five percent on US goods imported into Mexico with a combined value of US $2.4 billion.
As of January 9, 2015, the NAFTA trucking dispute has been resolved. The first, and most obvious, result of this breakthrough will be the permanent lifting of the aforementioned retaliatory tariffs on US goods moving into Mexico. The Department of Transportation has specifically stated that, in order to gain free and full access to US roads, Mexican trucking companies must:
- accurately monitor drivers’ hours of service
- periodically conduct drug testing of drivers through HHS-certified labs
- unversally oblige their drivers to have either a valid US or Mexican commerical trucking license
- fully meet the DOT’s English proficiency requirments
In terms of ensuring the safety and road worthiness of Mexican long haul equipment the DOT also mandates that Mexican trucks undergo inspections every 90 days for a minumum period of four years. These reviews are in accord with the North American Standard Level 1 37-point inspections.
It is the opinion of Luis de la Calle that the fact that the NAFTA trucking dispute has been resolved will bring economic benefit to consumers throughout the NAFTA region in the medium to long-terms, as a result of lower the cost for businesses to engage in international trade.