Commerce between the U.S. and Mexico is one of the most important global trade relationships.
With a proposed pilot program from the Federal Motor Carrier Safety Administration at the U.S. Department of Transportation, that trade flow may start to increase to levels that benefit the entire supply chain and consumers as well.
In response to U.S. action to stop a pilot trucking program, Mexico imposed tariffs on 90 U.S. products in March 2009, which resulted in $2.4 billion in lost trade for U.S. companies and workers.
Last August, the Mexican government revised the list to include 99 U.S. products. Mexico is the U.Sâs third-largest trading partner and the harm done to these industries has put hundreds of millions of dollars in markets, capital and other investments directly at risk.
For the fresh produce industry, this has meant significant losses for a variety of companies, including shippers of almonds, apples, cherries, grapes, potatoes and strawberries.
The proposed pilot program is part of FMCSAâs implementation of the North American Free Trade Agreement cross-border long-haul trucking provisions.
It would allow Mexico-based motor carriers to operate throughout the U.S. for up to three years. U.S.-based motor carriers would be granted reciprocal rights to operate in Mexico for the same period.
Participating Mexican carriers and drivers would be required to comply with all applicable U.S. laws and regulations, including those concerned with motor carrier safety, customs, immigration, vehicle registration and taxation, and fuel taxation.
The safety of the participating carriers would be tracked closely by the FMCSA with input from a federal advisory committee.
The FMCSA proposed the program and sought comments from all interested parties, which PMA responded to on May 12.
PMA supports the proposed program and the resolution of the trade dispute that has resulted from the failure to implement this program.
PMA is also part of the Alliance to Keep U.S. Jobs, which has been focused on restoring trade.
As I stated in PMAâs comments, NAFTA was premised on the idea that increased trade serves the interests of all three countries: the U.S., Mexico and Canada.
According to the U.S. Department of Agriculture, sales of U.S.-grown produce to Mexican consumers have more than tripled since the agreement was signed, and overall U.S. agricultural exports to the NAFTA countries have increased 156% (compared to a U.S. agricultural export growth rate to all countries of 65%).
Unfortunately, the integration of the markets and the expansion of trade with Mexico have been limited by the U.S. governmentâs failure to abide by the agreementâs requirement to permit cross-border trucking.
The tariffs and resulting harm to U.S. interests are a direct and predictable result of the failure to implement a cross-border trucking program.
The pilot program proposed in this notice will begin the process of lifting the sanctions affecting the U.S. economy.
It addresses safety standards so there can be no claim that this pilot endangers the safety of U.S. roads and citizens.
In fact, the multi-state pilot permits only those carriers that have demonstrated a sufficient commitment to safety to be part of the program.
What is more, it abides by the U.S. commitment made many years ago in NAFTA. The program protects U.S. highways while facilitating increased trade and economic opportunity.
The fresh produce industry is a global marketplace. When consumers in the U.S. and around the world eat more produce, everyone wins â from the grower to the retailer, the foodservice operator, and all the support industries that allow fruits and vegetables to move through the distribution system.
This is not a competitive issue, but one that, when resolved, ensures overall industry benefits.
Many U.S. exporters have suffered from this trade dispute, and Mexican consumers have not had access to key U.S. products.
This pilot program puts us on course to correct both of these critical issues.
Bryan Silbermann is president and chief executive officer of the Produce Marketing Association, Newark, Del.
Agree? Disagree? Leave a comment and tell us your opinion.