Tuesday, March 9, 2010

End of US/Mexico Truck Program Hurting US Farmers

The end of a Bush Administration pilot program that allowed a limited number of Mexico-domiciled trucks to enter deep into US territory has affected farmers in the Western United States.

In response to the cancellation of the cross-border program by the Obama administration last year, the Mexican government implemented a 20 percent tariff on more than 90 US agricultural and industrial export products worth nearly $2.5 billion a year.

The Mexican government, staunch supporters of opening the US/Mexico border to all trucking, has remained adamant that the tariff will remain in place until a full cross-border program – not just the original pilot program – is implemented by the US.

The Bush Administration Department of Transportation pilot program, which started in September 2007, provided for the authorization of truck fleets from 100 pre-screened Mexican trucking firms to travel throughout the US, well beyond a narrow 20- to 25-mile border zone. The plan also provided for an equal number of US truck firms to be authorized to receive reciprocal access to Mexico. 

Under the terms of the North American Free Trade Agreement, signatories Mexico and the US must allow access to trucks from each nation. Since the implementation of NAFTA in 1994, however, Congressional legislation and litigation spearheaded by US labor unions and public safety groups have limited Mexican trucks to the narrow 20- to 25-mile-deep zone along the border.

Ultimately several hundred Mexico-domiciled trucks were operating under the authority of the pilot program.

From its inception, the DOT pilot program met fierce opposition from labor, trucking and public safety groups, with most critics citing concerns of American job losses and inadequate US control of safety regulations on Mexican trucks and drivers.

Twice in 2007, both the House and Senate amended de-funding language regarding the truck program to transportation bills that were eventually signed by the White House. 

However, the program, originally set to run for a year, continued to operate until a third attempt at Congressional legislation ending the program was passed and then signed by President Barack Obama in March 2009. The Mexican government imposed the tariff on US goods shortly thereafter.

Since then, US agriculture producers in the Western US have been particularly hard hit by the tariff, as Mexican purchasers have turned to other suppliers not affected by the tariff such as Canada and China.

Washington state, the third largest exporter of agricultural goods to Mexico, reported a nearly $20 million decline in agriculture exports to Mexico – excluding corn, rice and soybeans – in 2009 compared to the year before. The state also reported that half of it's pre-tariff $28 million a year in frozen potato exports to Mexico have disappeared and are now being bought mainly in Canada. Apricot, berry, cherry and mixed nut exports from Washington State to Mexico have also declined since the tariff took effect.

California and Texas, the two leading exporters of agricultural goods to Mexico, have each suffered even heavier losses. 

The situation, and the potential for even further losses, has caused members of Congress to push for the cross-border program’s immediate reimplementation.

On Thursday, Sen. Patty Murray, D-Wash., asked the Department of Transportation during Capitol Hill subcommittee meeting to move more quickly on reimplementation as possible.

"We are finalizing a plan," DOT Secretary Ray LaHood told Murray. "The reason it's taken so long is because there's a lot of moving parts, including about five different cabinet officials, and every time we make a tweak or a change everybody has to sign off on it. But we're very near a proposal that we think will meet all of the safety concerns that I heard when I talked to 25 members of Congress."

In other moves to head off the situation, language defunding the truck program was not renewed in the latest Congressional appropriations bill, and the US trade representative to Mexico told Reuters last month that negotiations over ending the tariff were set to intensify.

Members of the Mexican government have said that the tariff will remain in place until a permanent cross-border solution – as called for under NAFTA – is implemented by the US.