Trucking Issue at US-Mexico Border Remains On Hold Despite NAFTA Plans
Dec 1, 1999 12:00 PM
Despite earlier projections that the United States would allow Mexican trucks into border states' interiors by January 1, 2000, it appears the NAFTA-related provisions remain on hold. The word from the Office of the Secretary of Transportation is that until US officials determine Mexican trucks and drivers are safe, they will be forbidden entry to the interior.
Discussions between officials of the United States and Mexico continue in efforts to establish safety regulations and work toward a smooth crossing procedure, says a spokesman in the secretary's office.
Although the trucking issue on US-Mexico border crossings remains unresolved at this time, prospects for the future are positive. The Mexican economy is improving and is expected to expand - and with it opportunities for carriers in both countries, says Albert
"Butch" Bingham, president of Bulkmatic Transport Company, Griffith, Indiana. Nick Braden, vice-president for sales at Initial DSI Transports Inc in Houston, Texas, notes that the Mexican manufacturing industry, already well established, is projected for further growth, which will call for additional tank truck shipments across the border.
Harry Elliott, sales manager at Enterprise Transportation Company in Houston, seconded his colleagues' projections. He predicts the situation will begin to change when US investors are allowed under NAFTA to invest in Mexican companies, which will give US carriers more control over operations.
Rob Harrison at the Center for Transportation Research, The University of Texas, Austin, notes that in January 2000 foreign investment in Mexican trucking companies will be allowed a controlling interest of 51% and will be increased to 100% on January 1, 2004.
Bingham points out that many Mexican tank truck carriers run operations that are modern and safe. "It is a great myth that they aren't handling their companies properly. They are doing good work. Their trucks are well maintained. They aren't going to be irresponsible."
Heavier Loads On the downside, trucks in Mexico are allowed to carry heavier loads than US trucks. Similar weight allowances are occurring with tank containers. Bingham believes Mexican carriers will be allowed to operate with the heavier loads in the US, giving them a competitive edge. "I just don't know why they won't be," he says.
At the same time, Mexican companies have lower-cost operations than their counterparts in the United States. However, Bingham predicts the differences will equal out quickly. Meanwhile, the issue involving Mexican trucks crossing into the US interior is at a standstill. "There is not enough political support in Washington (to prod the issue)," says Harrison. "The exact agenda is not clear ... reelection politics make it pretty difficult at the moment."
Complicating the mix is the US trade with Canada and Mexico, estimated at $477 billion annually. Harrison points out that Canada has been optimistic that the part of NAFTA involving truck crossings would be implemented. "Their optimism was based on President Clinton's emphasis on world trade and a real sense that Mexican truckers had improved safety and training, making the timing right."
However, the president has pledged that the borders will not be opened for unsafe Mexican trucks and unqualified drivers. With an election year approaching and NAFTA already a campaign issue, politicians are less likely to take a role in an issue that may be extremely controversial.
Union Opposition The Mexican trucking issue doesn't involve just bureaucrats and trucking companies. The Teamsters have been a major opponent of NAFTA because the union believes the agreement encourages US companies to move operations to Mexico, costing US workers jobs. Specifically, the union has voiced safety concerns about the proliferation of older and heavier Mexican trucks on United States highways, according to the Teamsters web site.
Additional concerns include lack of emission standards, comprehensive insurance, comparable driver training, and access to driver police records.
National Tank Truck Carriers President, Cliff Harvison, offers a view of the issue. "The failure to implement the transportation provisions of NAFTA was, is, and will remain political," he says. "In 1996, the Teamsters withheld substantial financial support from the President's reelection campaign until Mr Clinton publicly raised the safety issue and sent DOT inspectors to the border. Then, the Teamsters made political contributions to the campaign.
"Today, the only major element of organized labor that has not endorsed Vice-President Al Gore in his campaign for president is the Teamsters. It is reasonable to expect that James Hoffa (president of the union) will keep the purse strings tied until after either Gore or Bill Bradley (Democratic presidential candidate) is assured of the nomination, at which point the same 1996 quid pro quo will be offered to the survivor.
"Safety is always a convenient whipping boy, and I can't envision the union giving money to a pro-NAFTA Texas governor (George W Bush, a Republican presidential candidate) who converses in Spanish."
Most people familiar with the issue agree the English- Spanish language barriers are at the top of the list for difficulties at the Mexican border, both in reaching agreements and conducting business. Sharing the top of the list with language problems are widely different institutional practices such as custom regulations, freight forwarding, and brokers.
There are also other considerations. Harrison notes that the border states want more time to prepare for the influx of trucks. The Texas Legislature, for example, insists that Mexican trucks meet Texas regulations as well as federal regulations.
Harrison adds that at the border, northbound trucks can be subject to three different safety inspections by city, state, and federal officials. "In fact, northbound trucks can be inspected by over seven different agencies, mostly acting independently of each other, obviously contributing to congestion and inefficiency."
The International Safety Programs Division of the Motor Carrier and Highway Safety Office has primary federal responsibility for implementing the cross-border truck provisions of NAFTA, according to information from the Department of Transportation web site. Those duties include ensuring foreign carriers operate in compliance with all federal motor carrier regulations.
"That requires a lot of planning for Mexican companies," Harrison says. "We need a binational solution. The whole thing has to be planned as a system. It is the only way out of this problem."
Trucker Access All of this began when the North American Free Trade Agreement (NAFTA) between the US, Mexico, and Canada took effect on January 1, 1994. January 1, 1996, was the date when truckers were to be allowed access to Mexican border states (with reciprocal access to US border states for Mexican truckers). Six years after the signing, all signatories were to be allowed full cross-border access for international shipments, but the full cross-border phase was unilaterally postponed by the Secretary of Transportation.
"Obviously, we are behind," says Harrison.
When the border opening was postponed by the Secretary of Transportation in 1995 and rescheduled for 2000, the preparations to meet US demands slowed down in Mexico.
"They went back to the way they've always done things," says Harrison.
In Canada, it's a different story. Most of the country's industry is near or at the border, and there is the long-standing border arrangement which is entirely different from that in Mexico, he says. An added plus is the absence of a language barrier.
Whatever the future may bring, Bingham predicts cross-border trucking will be achieved. "For sure within five years, maybe even three," he says.
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