FMCSA to Allow Mexican Long-Haul Truckers, Ending Threat of Retaliatory Duties
The Federal Motor Carrier Safety Administration will allow Mexican carriers to conduct long-haul, cross-border trucking services in the U.S., ending the threat of retaliatory tariffs authorized by NAFTA arbitrators. The agency’s decision follows a three-year pilot program that allowed Mexican trucking companies to operate north of the border, it said in a Jan. 9 press release (here). Following the end of the pilot in October, FMCSA determined that trucking companies from Mexico had the same levels of compliance with safety standards as their U.S. and Canadian counterparts, it said.
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Retaliatory duties had been authorized in 2001, when a NAFTA arbitration panel ruled that the U.S. was not in compliance with cross-border trucking provisions of NAFTA. Mexico held off on imposing the duties until the end of a similar cross-border trucking pilot in 2009, when it set over $2 billion in retaliatory tariffs on exports of U.S. agricultural products, personal care products and manufacturing goods (see 09033130). Mexico suspended retaliatory duties once again in 2011 when FMCSA began the pilot program that expired in October (see 11102123), and is now “expected to” permanently terminate the retaliatory duties, said FMCSA.
U.S. Trade Representative Michael Froman said his agency will continue to work to end the threat of Mexican retaliation. “The successful conclusion of the pilot program provides the basis for the permanent resolution to this dispute,” said Froman, according to the FMCSA. “We have been, and will continue to work with Mexico to ensure that the threat of retaliatory duties will now be brought to a swift conclusion as well,” he said. “Formally concluding this process will help us continue our work to expand trade and investment opportunities between our countries.”
The National Foreign Trade Council applauded the move toward resolving the cross-border trucking dispute. "Mexico is one of our most important trading partners, so the announcement to normalize the ability of Mexican carriers to apply for authority to operate cross-border trucking to transport goods into the United States is a big win for our bilateral trade relations,” said NFTC Vice President for Regional Trade Initiatives Chuck Dittrich in a Jan. 12 press release (here).
However, the International Brotherhood of Teamsters denounced the FMCSA decision, citing concerns from the final FMCSA report on the pilot (here) that the Mexican companies that participated may not be representative of the country’s trucking industry as a whole. “This policy change by the [Department of Transportation] flies in the face of common sense and ignores the statutory and regulatory requirements of a pilot program,” said Teamsters General President Jim Hoffa. “Allowing untested, Mexican trucks to travel our highways is a mistake of the highest order and it’s the driving public that will be put at risk by the DOT’s rash decision.”