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The US-Mexico Cross-Border Trucking Dispute

The US-Mexico Cross-Border Trucking Dispute

The US-Mexico cross-border trucking dispute has been a point of contention between the two NAFTA partners since the pact’s inception.

Under NAFTA, the US was to give Mexican commercial vehicles full access to four US border states immediately, followed by access to all of the continental US in 2000.

The intent of the historic agreement was to eliminate trade barriers and streamline cross-border movement of goods and services among the three North American countries. However, the US-Mexico cross-border trucking dispute between the two countries has been a source of contention ever since. The arrangement, as defined by the NAFTA, has yet to be implemented. Under pressure from organized labor, environmentalists,and prominent Democratic legislators, the United States has refused to implement NAFTA’s trucking provisions for the last twenty years, claiming that Mexico’s truckers work longer hours, experience more fatigue, drive older and less roadworthy trucks, and may pose a threat to national security or aid in smuggling immigrants and drugs.

The Mexican government, of course, objects to the aforementioned impediments to implementation, and contends that the US-Mexico cross-border trucking dispute constitutes a violation of US commitments under NAFTA. Canada has acted as mediator in the complaint, and in 2001, the board of arbitration determined unanimously that the US was in breach of its obligations under the NAFTA. However, Mexico did not retaliate at that time, nor did the US alter the status quo.

During several years of inaction, Mexican trucks were limited to a 25-mile commercial zone in US border states, while US trucks were similarly limited in Mexico. Finally, in 2007, the US launched the Cross Border Demonstration Project, an initial pilot trucking program that granted only a small number of Mexican trucks and truckers access to the heartland, only after being subjected to rigorous testing and certification. The program was intended to last only one year, but President George Bush kept it in place for two additional years after Congress attempted to defund it.

Upon entering office, President Obama and a Democratic-led Congress pulled the plug in 2009. Mexico quickly retaliated with $2.4 billion in tariffs on 90 manufactured and agricultural export goods.

The pilot program’s suspension resulted in a historic lawsuit filed in 2009 under NAFTA by the National Cargo Transportation Association (CANACAR) – a private Mexican trade group that represents 4,500 trucking companies. The suit sought $6 billion in compensation for losses allegedly suffered since the first restrictions were imposed on Mexican carriers during the twenty year US-Mexico cross-border trucking dispute.

The Obama administration responded to calls for a new pilot like the Demonstration Project of the Bush years by implementing an “initial concept” program
in 2011. The program has only involved about 13 carriers, however, and most of the activity comes from two large carriers, demonstrating how difficult it is for the Mexican trucking industry as a whole to get on board with such an unstable step in the right direction. With the pilot program set to expire later this year, and no serious talk of fully complying with NAFTA requirements for cross-border trucking access, CANACAR is preparing to reinstate their 2009 complaint before a NAFTA panel – only this time, the amount in damages that will be claimed is said to be up to $30 billion.

 

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