GRISWOLD: Mexican trucks spat costly to economy

ANALYSIS/OPINION:

On Friday, the 30-day comment period will close on a proposed new pilot program that will allow safety-certified trucks from Mexico to deliver goods inside the United States. So far the comments are running heavily against the program, fueled by protectionist fears whipped up by the Teamsters union, and — let’s be candid — residual prejudice against our neighbors to the south.

President Obama should ignore the noise and stick to his plan to finally resolve this long-running dispute with our third-largest trading partner. This is not an issue of safety or jobs, but of honoring our commitments as a nation and doing a favor to our own economy.

Under terms of the North American Free Trade Agreement, enacted in 1994, the United States and Mexico were supposed to allow safety-certified trucks and drivers to make deliveries to destinations inside each other’s country. Under the agreement, qualified long-haul Mexican trucks could serve the four U.S. border states by 1995, and all other states by 2000, with U.S. trucks granted reciprocal access to Mexico. But President Clinton, under pressure from the Teamsters, suspended the trucking provisions unilaterally under the cover of safety concerns.

Under President Bush, the United States established a pilot program in 2007 that allowed hundreds of Mexican trucks to make deliveries within the United States under a rigorous inspection regime. But bowing to protectionist pressure once again, Congress defunded the program in 2009, prompting Mexico to impose legally authorized sanctions on $2.4 billion of U.S. exports, sanctions still in place today.

Despite the hundreds of complaints already posted in the Federal Register, the Mexican trucking issue has never been about safety. The proposed pilot program would require Mexican trucks entering the United States to meet all federal regulations on driver qualifications, truck safety, emissions, fuel taxes, immigration and insurance.

Experience from the previous pilot program in 2007-09 demonstrated that Mexican trucks and their drivers are fully capable of complying with all U.S. safety requirements.

An August 2009 report from the Department of Transportation’s Inspector General found that only 1.2 percent of Mexican drivers that were inspected were placed out of service for violations, compared with nearly 7 percent of U.S. drivers who were inspected. In February 2010, the Congressional Research Service reported that recent data provided by the Federal Motor Carrier Safety Administration found that “Mexican trucks are as safe as U.S. trucks and that the drivers are generally safer than U.S. drivers.” What the Teamsters and their congressional allies really object to is that these trucks will be driven by Mexicans.

The failure of Congress to allow implementation of the NAFTA trucking provisions has proven costly to the United States in three important ways.

First, U.S. failure to comply has deprived our economy of the efficiencies of moving goods across our mutual border at lower cost. With the ban in place, trucks approaching the border are required to unload their cargo into warehouses in so-called commercial zones within 25 miles of the border, only to have that cargo reloaded on to short-haul vehicles and then onto domestic trucks for final delivery. This inefficient system causes delays, congestion and pollution at the border, resulting in additional transportation costs of $200 million to $400 million each year, according to the U.S. Department of Transportation.

Second, failure to comply has exposed U.S. exporters to sanctions on nearly 100 industrial and agricultural products, including meats, vegetables, fruits, chewing gum and chocolate. The sanctions would be lifted in two stages as the U.S. government implements the proposed program, boosting U.S. exports in tune with Mr. Obama’s National Export Initiative.

Third, failure to comply has compromised the U.S. government’s reputation as a good citizen of the global trading system. The Obama administration’s promise to more vigorously “enforce” our rights in the World Trade Organization and other agreements will lack credibility as long as the U.S. government fails to comply with such clear commitments as the trucking provisions of NAFTA.

Every month we delay in implementing the cross-border trucking agreement with Mexico will impose real damage on our economy and our reputation as a good neighbor.

Daniel Griswold is director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute and author of the 2009 book, “Mad about Trade: Why Main Street America Should Embrace Globalization.”

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