Thread: NAFTA: Mexican truckers to drive cargo into US interior

NAFTA: Mexican truckers to drive cargo into US interior

by Chris Roberts \ El Paso Times
Posted: 05/29/2011 12:00:00 AM MDT

As the Obama administration prepares to honor a 17-year-old treaty with Mexico allowing that country's long-haul trucks into the U.S. heartland, emotions are again at fever pitch as businesses on both sides of the border predict job losses and industry upheaval.

The North American Free Trade Agreement, or NAFTA, included a provision that the United States and Mexico would allow each other's trucks to haul cargo across the border for delivery anywhere inside the other country.

To comply with NAFTA, the Obama administration in April proposed a three-year pilot program with requirements for Mexican truckers that include a preliminary safety audit, purchase of U.S. insurance, English proficiency for drivers, truck inspections for every border crossing for at least the first three months, an 18-month probation period and a three-month renewal period for safety inspections after permanent authority is granted.

"Participating Mexican carriers and drivers would be required to comply with all applicable U.S. laws and regulations, including those concerned with motor carrier safety, customs, immigration, vehicle registration and taxation, and fuel taxation," according to the program's legal description.

When the pilot program concludes, the Mexican haulers would receive the same authority granted U.S.-based truckers. Public comment on the proposed program ended last week, and the final version is expected later this year.

But the devil has been in the details in the United States as objections have arisen over safety, fair competition, reciprocity and other issues.

Some Mexican carriers are concerned that opening the borders will encourage U.S. haulers to locate in Mexico and dominate their industry.

"I wasn't in Congress when they voted for NAFTA," said U.S. Rep. Silvestre Reyes, D-Texas. "But I think we signed the treaty and we should follow the treaty and respect its conditions."

Reyes said he believes the safety provisions will protect U.S. drivers and highways. The impact on U.S. jobs will be minimized by the fact that the treaty allows only cross-border shipments, he said, not hauls between domestic businesses.

"They are not allowed to compete directly with the U.S. trucking industry," he said.

Emotion has clouded discussion of the issue, said Jerry Pacheco, executive director of International Business Accelerator, a Santa Teresa small-business development center. Pacheco started tracking the cross-border trucking industry before NAFTA went into effect in 1994.

"It's kind of overblown," Pacheco said of reaction. "It's sensationalized or politicized."

Pacheco said Canada, the United States and Mexico need to create a trading bloc to become more globally competitive. Allowing more efficient trade among the countries also would lower prices of some goods the countries import from each other, he said.

Most program critics, however, are focused on shorter-term issues. Several El Paso and Mexican trucking companies that operate in this region did not want to talk about the pilot program or its ramifications.

Nationally, the International Brotherhood of Teamsters and some independent drivers, who often operate on thin profit margins, say the program will cost many U.S. drivers their jobs. For example, if Mexican trucks can deliver cars from Mexican manufacturing plants, it will cut into Teamster jobs that have already dwindled due to competition from nonunion carriers and railroads, according to a May status report on "Mexican Trucks in the United States" authored by the Congressional Research Service.

"Here in the United States, motor carriers must comply with regulations that are increasing all the time," said Norita Taylor, a spokeswoman for the Missouri-based Owner-Operator Independent Drivers Association, which has 151,000 members including small-business motor carriers and professional drivers.

The association filed a 205-page objection to the proposed program. "That translates into operating costs," Taylor said. "In Mexico there are no such regulatory standards, and therefore it creates an unlevel playing field."

When U.S. haulers go out of business, it also hurts companies supporting them, she said.

Trucking company owners in Mexico have similar fears.

"My colleagues in Mexico are deathly worried about opening up (the border) because they think the U.S. carriers are going to take away their business," Pacheco said. "They see the United States trucking companies as having a great advantage."

He cited easier access to capital, more-efficient operations and early adoption of high-tech equipment.

Despite the strong reactions, the number of Mexican trucks flowing over the border is expected to be small at first, and the number of U.S. trucks headed south a fraction of that.

"Relative to rail and coastal shipping, trucking is more costly for long-distance shipments, even with a driver paid according to Mexican wage scales," the Congressional Research Service report states.

And to make a profit, Mexican trucks would have to find loads to haul on the return trip, according to a 2001 General Accounting Office report. That requires business contacts and, depending on the load, specialized containers with refrigeration or insulation to protect sensitive cargo such as produce or electronic gear. Car haulers also require specialized gear.

"It's not likely they would make those trips on a speculative basis," Pacheco said.

During a 2007 Bush administration pilot program that lasted about 18 months, Mexican trucks made 12,516 trips into the United States, only 11.5 percent of which went beyond the commercial zone, according to the Congressional Research Service report. Only 80 trips were to destinations outside a border state, it says.

Insurance requirements also are expected to discourage Mexican haulers.

Insurance industry officials told authors of the General Accounting Office report that "premiums for Mexican trucking companies will initially be set at the highest level and gradually decline as the market matures."

Fewer U.S. haulers appear to be interested in driving into Mexico. During the Bush program, only 10 carriers participated, the Congressional Research Service report states, and only four of those continue to operate.

U.S. operators are concerned about cartel-related violence in Mexico, Taylor said, which makes a provision of NAFTA requiring reciprocal opportunities impossible. U.S. owners also are leery of the Mexican legal system, she said, which allows equipment and cargo to be held while a case is investigated.

"We had a member a few years ago who that happened to," Taylor said. "It took months for him to get his truck back."

Currently, Mexican trucks can cross into the United States, but they are limited to a "commercial zone" ranging from 3 miles to 25 miles from the Southwest border. In most cases, cargos are unloaded within that zone and delivered throughout the country by U.S. carriers.

Mexico prohibited U.S. trucks from crossing its borders, but it opened the borders during the 2007 pilot program.

The U.S. Congress cut off funding for the Bush program, but Mexico has continued to allow U.S. trucks in. Days after the program ended in 2009, however, Mexico started imposing tariffs on U.S. goods -- including certain cuts of pork, cheese, apples, wine and other items -- that have cost this country $2.4 billion.

Recent talks between the two nations resulted in a U.S. commitment to the pilot program and Mexico announced it would remove the tariffs in phases, ending them entirely when the first Mexican carrier is given operating authority in the U.S.

"I look forward to consulting with Congress and moving forward in a way that strengthens the safety of cross-border trucking, lifts tariffs on billions of dollars of U.S. goods, expands our exports to Mexico, and creates jobs on both sides of the border," President Barack Obama said in May during a joint White House news conference with Mexican President Felipe Calderón.

Despite a new program with more stringent inspection routines, old arguments against opening the border to Mexican trucks have resurfaced. Critics say Mexican trucks are more likely to have substandard equipment such as brakes and tires, to be driven by unqualified people and to be overloaded, which can cause road damage.

Mexican trucks have proved to be as safe as their U.S. counterparts, Pacheco said. The Congressional Research Service report backs up that assertion.

"Based on the results of roadside truck inspections in the United States over the last five years, Mexican trucks and drivers have a comparable, if not slightly better, safety record than U.S. trucks and drivers," the report states.

About 4,600 Mexican carriers now operate within the commercial zone, and about 1,000 Mexico-based, but U.S.-owned, carriers have limited operating authority beyond the commercial zones, according to the report.

It also states that Mexican long-haul trucks participating in the Bush pilot program had superior safety records, but the numbers were too small to draw solid conclusions.

Nonetheless, when Mexican truckers enter the United States, there is no way to ensure that they are following rules -- which do not exist in Mexico -- about how many consecutive hours they can work, Taylor said. "And fewer than 5 percent of trucks crossing right now are inspected," she added.

Another provision that particularly galls U.S. independent truckers involves a proposed regulation that would require purchase and installation of a $2,000 piece of equipment that records driving time and truck location. It would replace inexpensive paper logbooks currently in use. Under the Obama plan, the U.S. government would equip Mexican trucks with those recorders.

It will cost an estimated $2.5 million for the three-year pilot program, of which $750,000 of would be spent in the first full year, U.S. Department of Transportation officials said in an email.

The recorders are necessary to ensure compliance and safety, and by paying for them, the department will "own and control" all data gathered, the e-mail said.

Mexican trucks could be on U.S. roads sooner than people think, Taylor said. The Obama program would give credit for time spent in the Bush program.

"Some of them could be operating in a few months with full, irrevocable authority," she said.

Chris Roberts may be reached at chrisr@elpasotimes.com;546-6136.

http://www.elpasotimes.com/news/ci_18164307

Why isn't someone in the Congress stepping up to stop this like Sen. Dorgan did last time? It's just plan stupid to think this won't hurt American truckers and cost jobs. Sure it'll help businesses because their cargo and freight will be shipped to them from Mexico at less cost. Not only will truckers be losing jobs but a lot of folks doing other jobs in the trucking industry will also lose jobs. Furthermore, some freight companies will also move to Mexico or at the very least open branches up in Mexico where they can hire cheap labor to haul their cargo.

When is enough, enough? When will Americans stand up and stop our big business supporting U.S. Congress from outsourcing our jobs?

Can you say, "North American Union?" Thanks Bill Clinton, and both George Bush's. This is about the global elites and the New World Order as Bush 1 said. We've got to get NAFTA repealed somehow and begin putting high tariffs on imports so that American industry can grow again and get people that are CITIZENS of this country to work.

Get us out of NAFTA!!!!!!!!!!!!!!

W

So where are the American trucker's Unions? I havent seen much of anything from them and their very members livelyhoods are at stake here....Pitifully quiet

And to make a profit, Mexican trucks would have to find loads to haul on the return trip, according to a 2001 General Accounting Office report. That requires business contacts and, depending on the load, specialized containers with refrigeration or insulation to protect sensitive cargo such as produce or electronic gear. Car haulers also require specialized gear.

"It's not likely they would make those trips on a speculative basis," Pacheco said.

In other words, the mexican truckers want a guaranteed return load before they begin their trip north.

Freight companies will not have to move to mexico in order to capitalize on this cheap mexican trucking. These freight companies will be able to exploit this cheap labor, sanctioned by our own government.

Mexican truckers will be moving freight north from mexico to destinations across this country. In order to make money, you have to have a load on your back at all times. This means, once the load is delivered, the Mexican trucker will be able to pick up another load and move that load south, before crossing the border back into mexico to start the process all over again. Anyone who says they will not be competing with American truckers is simply uninformed and delusional.

There is no way these truckers would deliver a load and then bobtail (without a load on your back) back to mexico! That's not going to happen and they admit that!

Potentially, a Mexican trucker might remain in this country indefinitely, moving freight once they cross the border - even though the agreement states they are not allowed to do this. They absolutely have the potential to take a substantially number of jobs away from American truckers who will be undercut by this cheap Mexican trucking.

We should have imposed a tariff on Mexican goods as soon as they put a tariff on our. The trade between Mexico and US is tipped heavily in their favor so a tariff would cost them a great deal of money.

We are doomed. These trucks will have more illegals and drugs than anything else.

A tariff sounds good but it would cost the us citizens more money.Tariff are put on the product coming in but the shippers then raise up the prices of their goods to make up the tariff.Best thing to do is just stop the trucks and quit buying anything made in mexico.

American trucking companies currently have the unilateral right to own a Mexican trucking company. As a result the more efficiently run Mexican trucking firms have seen their less efeiccient competitors get purchased by Americans truckers and resuscitated when they were hoping to absorb their clients. Some of the Mexican trucking companies have been saying they would rather see an end to American ownership there than to send their trucks here.

In order for a Mexican trucking company to operate here they would have to do it with American standards for trucks and drivers. As a result the competitive threat from the Mexicans is much less than some fear. There are only a limited number of Mexican trucks and drivers that could pass the United States requirements. The drivers know it too, they are going to demand higher pay from any employers reflecting their ability to pass the required tests. This makes it less enticing to Mexican truck owners.

Bad things sometimes happen to Mexican trucks parked in truck stops, highway rest stops
and when they are driving down dark lonely highways late at night.
Or so I've been told.