U.S., Mexican Officials Express Frustration about Impasse Over Cross-Border Trucking

This story appears in the June 7 print edition of Transport Topics.

U.S. efforts to resolve the ongoing dispute with Mexico over cross-border trucking have stalled, rankling officials on both sides of the border.

“It keeps mounting,” a Mexican official with knowledge of the situation said about the inability of the United States to come up with a suitable plan for re-opening the border to Mexican trucks. He said the country was close to imposing a second round of tariffs on U.S. goods exported to Mexico.

The same official said that the Mexicans were “not expecting anything” during President Felipe Calderon’s Washington visit last month and warned U.S. officials of mounting pressure.

The Mexicans told U.S. officials that they wouldn’t be able to simply continue, saying, “We hope for a resolution” and that “we would need to raise the level of our concerns because of the domestic pressures the president faces on this one,” the official told Transport Topics.

In April, the two countries agreed to form a working group to resolve the issue, but a spokeswoman for the U.S. Department of Transportation said no group has yet been named.

“Once the U.S. finalizes a proposal that will be shared with Congress and the Mexican government, representatives from the two governments will meet and negotiate the terms of the new program,” Olivia Alair told TT, but added she didn’t know when a proposal would be finalized.

Nkenge Harmon, deputy assistant U.S. Trade Representative, said that she had no information about the working group or a timeline for resolving the dispute. She said only that the administration was “committed to working with the government of Mexico to resolve the dispute in a manner that is consistent with our international obligations and that ensures our roads are safe.”

In March, Mexico threatened a new round of tariffs if the border was not opened to longhaul cross-border trucking (click here for previous story).

Tariffs on $2.4 billion worth of exports were imposed in March 2009, and Mexico is “close” to issuing a second round of tariffs, the official said. “The list is already ready. I’d say it is more a matter of weeks than months.”

“Plain and simple, the U.S. must comply with its international obligations,” the official said, adding that a new pilot program replacing the cross-border agreement that Congress ended March 2009 may be acceptable.

“If it is accompanied by a specific time frame and a specific set of commitments that would allow us to move to a comprehensive holistic solution, then obviously we would accept an interim program,” the official said.

The North American Free Trade Agreement said Mexican trucks should be allowed to deliver to destinations in the United States, but a moratorium and lawsuits blocked them until 2007 when the Bush administration launched the pilot.

The tariffs have led some in Congress to push the Obama administration to seek a settlement.

In a June 1 letter to President Obama, Sen. Patty Murray (D-Wash.), chairwoman of the Senate Appropriations subcommittee that oversees DOT, said “now is the time to take the next step forward.”

“Unless action is taken immediately there is a good chance that this shift in exports will lead to continued job losses and have a long-term impact on our economy,” said Murray, who had opposed the initial program.

In May, Transportation Secretary Ray LaHood told Murray’s committee that a decision on the Mexican issue was “closer than soon.”

Business officials said they felt that administration statements have been mostly cosmetic.

“There’s been a little bit more lip service out there, I think to calm nerves,” said Dave Akers, vice president for C.R. England’s Mexican division. “They’ve been very vague and ambiguous on timing. Statements like ‘We very quickly would like to have a solution,’ and ‘We see getting this resolved sooner rather than later,’ those kinds of things.”

Akers told TT that he believed that Mexico has succeeded “in keeping the issue at the forefront, the top paper in the inbox kind of thing.”

“We continue to hear that the Obama administration is ‘close’ to announcing a proposal to resolve the issue, and that we will ‘soon’ see a plan. American manufacturers could use resolution of this as ‘soon’ as possible to aid economic recovery and prevent the further loss of jobs,” said Doug Goudie, director of international trade policy for the National Association of Manufacturers.