Obama Meets With Mexican Leader

This story appears in the April 20 print edition of Transport Topics.

Standing beside Mexico President Felipe Calderon, U.S. President Obama said he was hopeful the two countries could agree on a cross-border trucking program that has spurred a growing trade dispute.

“My team is working with President Calderon’s team to resolve this issue,” Obama said during an April 16 joint press conference in Mexico City. “And I’m hopeful we can resolve it in an effective way.”

Obama, making his first trip to Latin America, said he was aware of Mexico’s concerns that he signed a bill last month closing a test program that allowed Mexican trucks to deliver goods in the United States.

But he placed the blame on Congress, which inserted the provisionblocking the cross-border program in the 2009 government funding bill, and said he wanted to resolve the dispute that has escalated to Mexico’s slapping $2.4 billion in tariffs on 90 different categories of U.S. products.

“That wasn’t a provision that my administration introduced, and I said at the time we need to fix this because the last thing we want to do at a time when the global economy is contracting and trade is shrinking is to resort to protectionist measures,” he said.

The Obama administration has been working to re-establish cross-border trucking in some fashion.

Obama said the dispute is “not helpful to a number of U.S. producers who are interested in selling into Mexico and are fearful they may be subject to countervailing tariffs or retaliation. So, we’re going to see if we can get this fixed.”

An official with the Department of Transportation told Transport Topics before Obama left for Mexico that the agency had sent a “set of principles” for re-starting cross-border trucking to the White House, and those principles were “under review.”

White House Press Secretary Robert Gibbs told reporters while

en route to Mexico City that an an-nouncement of a solution during the trip was unlikely.

Despite the administration’s work there was some doubt about whether the administration can craft a program that mollifies both U.S. critics and Mexico.

“It really was the most minimal of pilot projects,” a transportation lobbyist who asked not to be identified said of the now-defunct program. “I don’t know where they go from there.”

“We don’t simply want to re-establish the pilot project we had, but to have a project with a lot more reach,” Humberto Trevino, the Mexican deputy transportation minister, told Bloomberg News. “We’re very optimistic that this will move forward.”

Rod Nofziger, director of government affairs for the Owner-

Operator Independent Drivers Association, said the Obama administration was “somewhat between a rock and a hard place given the legal parameters that have been set via previous legislation.”

In 2008, Congress directed DOT to keep the border closed until completion of a successful pilot project, and in the most recent appropriations bill said the agency could not spend any money in 2009 on a pilot program.

“What sort of plan are you going to have?” Nofziger asked. “They have to do a pilot program, but they can’t do a pilot program.”

The issue of the trucking program was one of several Obama was expected to address with Calderon.

“We’re aggressively working it, and when we get an agreement, we’ll announce it,” he said.

Even as the administration works to resume cross-border trucking, opponents of the program continue to pressure Obama to keep the border shut, despite the Mexican tariffs.

“After almost 15 years, the Mexican government has yet to take responsibility to raise its level of safety enforcement for Mexican trucks and drivers,” Teamsters union President Jim Hoffa wrote in an April 14 letter to Transportation Secretary Ray LaHood. “NAFTA gives the United States latitude to ensure that our high standards are maintained, and we should take every advantage of those parameters. So far, the goal of safety has not been achieved.”

After agreeing to the North American Free Trade Agreement in 1994, the United States issued a moratorium on trucking with Mexico.

In 2000, the country lost an arbitration hearing, which gave Mexico the right to seek damages through tariffs and sanctions. The next year, President Bush said he intended to open the border, but legislation and litigation delayed that until the start of the now-deceased pilot program in 2007.

In addition to the tariffs, the United States is also facing a private action on behalf of Canacar, Mexico’s largest trucking association, which is seeking billions of dollars in damages as a result of the border closure (4-13, p. 1; click here for previous subscriber-content story).