Mexican Truckers Can Now Carry Goods into United States

Mexican truckers will be able to carry goods deep into the United States, and vice versa, under a deal signed Wednesday in Mexico City to keep a 17-year-old promise, reports the New York Times.

The United States had refused to honour a condition of the 1994 North American Free Trade Agreement that allowed Mexican trucks to carry shipments across the border to a final destination. Regulations instead required those trucks to unload shortly after crossing the border. After more than a decade of waiting and negotiating, Mexico retaliated by imposing tariffs in 2009.

As part of the deal, Mexico will eliminate tariffs on $2.3 billion of American goods and agricultural products as soon as the first Mexican truck obtains a permit and is allowed to enter the United States.

As a preliminary step, the tariffs will be reduced 50 per cent by the end of this week.

The free trade agreement among Canada, Mexico and the United States, known as NAFTA, made clear that trucks could cross the border. But in 1995 the Clinton administration closed the southern gates, citing concerns about safety.

Mexico won a 2001 ruling allowing it to impose retaliatory tariffs, but it chose to keep talking with the Bush administration, resulting in a 2007 agreement on a similar pilot program.

Two years later, Congress cut off the financing, and Mexico responded with tariffs.

Under the new deal, Mexican truckers were able to apply for permits beginning July 7.

American officials estimate that the first trucks could roll across the border next month.

Like foreign airlines, Mexican truckers will be allowed to carry goods to and from destinations in the United States but not within the country. They must comply with American safety standards, and are subject to additional safeguards including electronic monitoring to ensure that they take regular breaks from driving. They also must pass drug screening and demonstrate an ability to speak English.

Source: Binyamin Appelbaum, U.S. and Mexico Sign Trucking Deal, New York Times, July 6, 2011.

For text: http://www.nytimes.com/2011/07/07/business/us-and-mexico-sign-trucking-agreement.html?_r=1

For more on Economic Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=17

First published by the National Center for Policy Analysis, United States

FMF Policy Bulletin/ 12 July 2011