Removing Barriers

US TRANSPORTATION and trade officials are scheduled to meet with their Mexican counterparts within days to begin talks on opening up US borders to Mexican trucking, according to David DeCarme, chief of the Maritime and Surface Division of the Department of Transportation's Office of International Transportation and Trade. DeCarme's office negotiated the land transportation provisions of the North American Free Trade Agreement (NAFTA).

Opening the border has become enough of a priority that it was added at the last minute to the February 16 meeting between US President George W Bush and Mexico President Vicente Fox. Border access was a running theme of the talk, which touched on drug smuggling and immigrant workers.

Most significantly, the meeting signaled a shift in attitudes for the two countries to mutual respect from wary mistrust. This change should make it much easier to resolve contentious issues, such as those related to NAFTA.

NAFTA receives much of the credit for the unprecedented growth in trade between the United States and Mexico over the past decade. Last year alone, more than $160 billion in trade moved between the two countries through November. At least 80% of that moved by truck, and it included chemicals and other liquid and dry bulk cargoes.

President Bush took a strong step forward on February 7 when he said that Mexican trucks hauling international cargo would be allowed to run throughout the United States. This announcement followed a unanimous ruling by a five-member arbitration panel that Washington was out of compliance with NAFTA when it barred Mexican fleets from hauling goods in the United States.

The final verdict, which upheld a preliminary decision in November, means that the United States must open its border to Mexican trucks or face a penalty that could reach as much as $2 billion a year. Some are saying it would be better to pay the fine.

NAFTA Treaty

NAFTA, a free trade agreement between the United States, Mexico, and Canada, called for Mexican trucks to have unrestricted access to highways in the US border states Texas, California, New Mexico, and Arizona by 1995 and full access to all US highways by January 2000. US truck fleets would have the same access in Mexico.

Under pressure from labor unions and other anti-trade groups, the Clinton Administration refused to implement the provisions. Further, the United States passed a law in late 1995 that prohibits Mexican trucks from operating more than 20 miles into the United States.

In frustration, Mexico filed a grievance with the NAFTA arbitration panel and banned US trucks from traveling beyond its border zone. If the US complies with the NAFTA panel ruling, Mexico would have to reciprocate in opening its border to US trucks.

The decision by President Bush to accept the panel ruling brought quick response, both positive and negative. Representatives from the trucking industry were generally in favor of the move, while organized labor remains vehemently opposed.

The US government should implement NAFTA's trucking provisions without further delay, said Walter B McCormick, president of the American Trucking Associations.

Pat Long, executive director of the Texas Tank Truck Carriers Association, said he believes that the US-Mexico border will be opened this year and that it should bring improved operating efficiencies for tank truck carriers on both sides. That is the promise of NAFTA.

Pedro Cerisola, Mexico's communications and transport secretary, said his country welcomed President Bush's decision and said his agency would work with truckers to prepare them for the border opening.

His optimism is not necessarily shared by all of his countrymen. Officials at CANACAR, the Mexican trucking association, said their members don't want to compete in Mexico with US carriers. They said many of their members would find it difficult to be competitive, and they want the border to remain closed.

They said the Mexican financial crisis of 1995 prevented many Mexican fleets from buying newer vehicles. The result is that the average vehicle age for Mexico's trucking industry is 17 years, compared with four years for US fleets.

Teamster Opposition

Not surprisingly, strong opposition also comes from the Teamsters, which led the drive to block the border in the first place. While Presidents Bush and Fox met for seven hours at Fox's ranch about 200 miles south of Mexico City, the Teamsters held a rally in El Paso, Texas, to voice their opposition to the NAFTA panel ruling.

The Teamsters were joined by a coalition of elected officials from Texas, highway safety advocates, environmentalists, and Mexican union officials. We are here today to support public safety over corporate profit, Phil Young, Teamsters freight director and international vice-president, told the crowd. Unsafe equipment and drivers with no basic worker protections are a recipe for disaster on our highways.

Immediately after President Bush announced on February 7 that he would honor the NAFTA panel decision, the Teamsters demanded that current restrictions remain in place until a system is operational to ensure that Mexican trucks meet US safety standards and comply with US law.

Joan Claybrook, president of Public Citizen and attack dog for the railroad industry, stated that Mexican trucks don't begin to approach US standards. She added that there is no way to be sure which trucks are safe, so the US border must remain closed.

Total Hysteria

Based on what other industry officials are saying, though, the hysterical scare comments are totally off the mark. Systems already are in place to ensure that Mexican trucks comply with US requirements.

In addition, the NAFTA arbitration panel clearly stated that the United States can set safety standards for any foreign trucking companies or drivers operating within its borders. However, Mexican trucking companies can't be held to a higher standard than is set for US and Canadian carriers.

Willard Workman, vice-president of the US Chamber of Commerce, said the safety inspection issue was a false concern. Mexican trucks already are allowed to operate 20 miles inside the United States.

Mexican trucks are being inspected as they cross the border. DOT's numbers for 2000 put the overall out-of-service rate for Mexican trucks before entering border commercial zones at 36%. Many of these trucks were local drayage vehicles. The overall out-of-service rate for US-owned trucks was 25%.

Most transportation experts said the safety claims of the Teamsters and others have little merit because Mexican companies will send only their best trucks and drivers north of the border. The biggest question at this point is whether truck safety enforcement and inspection systems in the US border states are up to the challenge.

Our members don't see this opening of the border as any real threat, Long said. Many US and Mexican tank truck carriers have been working together for a long time. The Mexican tank truck carriers our members deal with are good companies with excellent equipment and well-trained drivers.

We do need more DOT (Department of Transportation) inspection stations to handle the northbound flow. We want uniform safety inspections for everyone. I believe the Texas Department of Public Safety is already doing a very good job in this regard.

Today, Texas has 54 inspectors and supervisor's working full time. They conducted 9,500 inspections at Texas border crossings in 2000, compared with 5,000 in 1997.

Slow Growth

Industry experts said that there is general agreement that opening the border will not bring a flood of Mexican trucks into the United States. Nor will US companies swarm south. Change will come gradually.

About 180 Mexican trucking companies have submitted applications to enter the United States. Many fewer US companies have filed applications with the Mexican government.

Plenty of barriers stand in the way for carriers on both sides. Language is a big factor. Many Mexican drivers don't speak English well enough to operate comfortably in the United States. US drivers don't speak Spanish in many cases.

Border crossings are a time-consuming process. US and Mexican fleets alike will be reluctant to have their most experienced, most skilled, most productive drivers stalled at the border for a day or more at a time.

In place now is an antiquated system that takes three tractors to move a single trailer from one side to the other. The US truck hauls the trailer to a five-mile zone on the border. A drayage tractor collects the trailer and transports it across the border, at which point a Mexican truck transports the load south to its destination.

A further complication is that all shipments must be cleared through customs brokers at the border. The result of all these factors is congestion, delays, and cost. In stark contrast, the automated system in place for the United States and Canada makes the process of crossing that border a breeze.

It may be a long time before conditions on the US-Mexico border are equal to those on the US-Canada border. Meeting the NAFTA provisions to allow Mexican trucks to operate on US roads will be a big step in the right direction.

For additional Modern Bulk Transporter feature stories, visit www.bulktransporter.com

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