Calderon Hopeful for Settlement of U.S.-Mexico Border Dispute

This story appears in the May 24 print edition of Transport Topics.

Mexico’s president, Felipe Calderon, said last week that the United States and his nation would solve the countries’ ongoing trade dispute caused by the closure of the southern border to longhaul truck traffic.

However, some observers ex-pressed surprise or disappointment that the two countries did not announce a deal opening the border when Calderon visited Washington, meeting with President Obama and addressing Congress.

“We talked about the different obstacles that are there for complying with transportation obligations that have been established at NAFTA, a situation that impacts jobs, companies and consumers in Mexico and in the United States,” Calderon said during a May 19 news conference in Washington.  “And we shall work in order to achieve a quick solution with a constructive, creative solution in the long term in this, and many other areas.”

Under the 1994 North American Free Trade Agreement, Mexican trucks were supposed to have access to U.S. highways, but the Clinton administration imposed a moratorium on those trucks, largely based on union opposition.

In 2001, President Bush said he intended to lift the ban and in 2007, the Department of Transportation launched a pilot test involving a handful of Mexican trucks. However, Congress shut the program in March 2009 with an appropriations bill that withdrew funding for it.

In retaliation, Mexico imposed $2.4 billion a year in punitive tariffs on U.S. goods last year after the United States shut down the pilot program to allow a few Mexican carriers to deliver freight here.

Since then, the Obama administration has said it intends to restart the program and the two countries established a working group to find a solution, though a DOT spokeswoman said there was no more information on the panel (4-19, p. 1; click here for previous story).

While Obama did not publically address the dispute during Calderon’s visit last week, he did say that “Mexico is one of our largest trading partners, with trade that supports countless jobs here in America and in Mexico.”

“Because 80% of the trade passes over our land border, we reaffirmed our commitment to a 21st century border that is modern, secure and efficient,” Obama said in a Rose Garden press conference with Calderon on May 19. “And we’re directing our governments to develop an action plan to move in this direction, because our shared border must be an engine, and not a brake, on our economic growth.”

A senior administration official told reporters May 18 in a briefing posted on the White House website that Obama would “confirm his commitment to work with the Calderon government and with Congress to address the legitimate concerns that exist regarding the Mexican trucking program, while also abiding by our international obligations.”

The official said that the issue is one of importance to the Mexicans but added that it is “an issue that generates a great deal of interest and concern from members of Congress regarding safety aspects of the program, and those are concerns that we take seriously.”

Since the tariffs were enacted, there have been calls from Congress to both renegotiate the trucking provisions of NAFTA and for the administration to restart the program to end the tariffs.

Earlier this month, Transportation Secretary Ray LaHood told a Senate subcommittee that a new plan was “closer than soon,” leading to expectations that the administration could make an announcement during Calderon’s visit.

“Based upon recent rhetoric from the secretary of transportation, I’m a little surprised that the administration did not have something more to announce,” Rod Nofziger, director of government affairs for the Owner-Operator Independent Drivers Association, told Transport Topics. “However, I’m certainly pleased that they haven’t.”

OOIDA is one of several groups that have opposed opening the border.

Doug Goudie, director of international trade policy at the National Association of Manufacturers, said that “people are disappointed that there wasn’t an announcement, but I don’t think people were surprised.”

“Despite Secretary LaHood’s comments both in March and again in May . . . that sort of led people to have some hope that some sort of proposal would be circulated to the Mexicans and to Congress before Calderon’s visit so they could at least discuss it,” he said. “But, we’ve seen Mr. LaHood say it’s on its way for a number of months, so after awhile you start to think it’ll be here when its here,” he added.

Without a plan, the business community was preparing itself for Mexico to raise and expand the number of targets on the tariff list, Goudie said.

“We’re just waiting for the shoe to drop,” he said.

The two countries did form an executive committee to address border issues and signed a declaration on 21st Century border management on May 19.

In that declaration, Mexico and the United States agreed to work on “programs focused on reducing congestion and delays in cross-border traffic entering both Mexico and the United States, building a foundation for efficient border and expanded economic growth, improving community safety and quality of life, and reducing unhealthy emissions from idling vehicles.”

In addition, the two countries vowed to create or expand programs aimed at speeding the flow of commerce across the border.