Mexican trucks once again will be allowed to roll along U.S. highways, after the two countries announced in early March that the U.S. was dropping its ban on Mexican carriers.
Congress still has to vote on the agreement, however.
The announcement came as good news to the Nogales, Ariz.-based Fresh Produce Association of the Americas, which had opposed the ban as a violation of the 1994 North American Free Trade Agreement.
“We’re pleased there’s a resolution to this issue,” said Lance Jungmeyer, president of the FPAA, many of whose grower-shipper members are based in Mexico.
“For too long, this issue has served as a wedge between the U.S. and Mexico and it’s not good for trade between the two countries to have that sort of thing ongoing, so it’s good to see it was resolved.”
Mexico had responded to the ban by placing retaliatory sanctions on 90 U.S. products shipped to Mexico, including many fruit and vegetable items.
Retaliatory Mexican duties on U.S. fresh produce start at 5% on prepared/frozen potatoes and progress to 10% on onions to 15% on sweet corn to 20% on apples, apricots, cherries, grapefruit, grapefruit, oranges, pears and strawberries.
“After nearly 20 years, we finally have found a clear path to resolving the dispute over trucking between our two countries,” President Barack Obama said after his fifth meeting with Mexican President Felipe Calderon.
As part of the 1994 North American Free Trade Agreement, the U.S. had said it would allow Mexican haulers to deliver goods across the border.
Many in the U.S. trucking industry had opposed that idea, saying it would cost trucking jobs in the U.S. The Teamsters strongly opposed the idea of allowing Mexican trucks on U.S. roads.
Importers, on the other hand, have insisted that opening U.S. highways to Mexican vehicles would open new trade opportunities.
A pilot project that allowed Mexican trucks to travel U.S. roads was eliminated in 2009, leading Mexico to impose retaliatory sanctions on nearly 90 U.S. products.
Jungmeyer said the announcement likely wouldn’t lead to a flood of Mexican trucks bound for the U.S. — not yet, anyway.
“I haven’t looked at the deal close enough, but I think we won’t see a tremendous increase,” he said.
“You’re adding more and more days to the trip. We don’t see it as terribly likely that it will be a huge thing, at least at first. But it’s huge that the barrier is behind them and they can concentrate on other issues.”
The announcement did not come as a surprise, he added.
“I think there’s been talk of this for a couple of weeks,” he said. “There were people who were sort of waiting for this. They were pretty convinced that something would happen.”
U.S.-based produce shippers who look at Mexico as a potentially profitable market have been practically unanimous in calling for a lift of the ban.
“Our position is we want both U.S. and Mexico to live up to all their existing trade agreements, and when one party is not living up to its side of the trade agreement, it makes it an impediment to improving trade between the two countries,” Jungmeyer said before the announcement that the ban had been lifted.
The trucking industry had a different take on the issue, said Joe Rajkovacz, regulator affairs specialist with the Grain Valley, Mo.-based Owner-Operator Independent Drivers Association.
“We hope it gets shut down and that it doesn’t come to life again,” Rajkovacz said before the announcement.
The drivers association condemned the decision to lift the ban. In a written statement, Todd Spencer, executive vice president of the drivers association, said it was “simply unbelievable.”
“For all the president’s talk of helping small businesses survive, his administration is sure doing their best to destroy small trucking companies and the drivers they employ,” he said.
Rajkovacz said there’s a lot of confusion about trucking regulations in Mexico.
“There’s 10 weigh stations in all of Mexico,” he said. “They have no log books. We as U.S. truckers are told to compete with basically a third-world country and we have all of these regulatory costs and ways we have to comply with the regulations.
“They don’t have to in their country, and when they hit that border, there’s no assurance that the driver is legal because they don’t have a similar regulatory regimen in Mexico that we have in Canada and the U.S.”
Opponents of the truck ban say that all trucks — wherever they’re from — have to meet all U.S. standards, anyway.
Rajkovacz said he has his doubts.
Chuck Nelson, owner of New Braunfels, Texas-based Chuck’s Transport Inc., said he was hoping the ban would be lifted.
“I think there’s been a lot of incorrect press out there that the public is really not aware of,” he said before the announcement.
“Everyone is saying the Mexican truckers are going to come in and steal American truckers’ jobs. The Mexican truckers come, pick up a load in the United States and they have to pick up a load that’s destined for Mexico.”
Kenny Lund, vice president of support operations for La Canada, Calif.-based Allen Lund Co. Inc., said “the fear of Mexican trucks is unfounded. The test system worked very well.”
Lund said business sense had to prevail.
“Eventually, the market will win out,” he said.