The DOT Has Granted Mexican Trucks Full Access to the US
In the most recent LTL Freight controversies, the Federal Motor Carrier Safety Administration (FMCSA) conducted a pilot program between October 14, 2011, and October 10, 2014, that was part of FMCSA’s implementation of the North American Free Trade Agreement (NAFTA). The United States-Mexico Cross-Border Long-Haul Trucking Pilot Program evaluated the ability of Mexico-domiciled motor carriers to operate safely in the United States, and the United States-domiciled motor carriers were granted reciprocal rights to operate in Mexico for the same period.
This pilot program was a direct result and attempted resolution of the US breaking the 1994 North American Free Trade agreement that was set to allow US and Mexican trucks into the interior of their countries to pick up and deliver goods. The World Trade Organization found the U.S. in violation of the agreement in 2001 for not allowing Mexican trucks and authorized Mexico to retaliate. President Bush attempted to avert retaliation in 2007 by allowing some Mexican trucks to make deliveries to the Chicago area, but the Teamsters Union strongly opposed, causing Congress to cut all funding for the project. Mexico retaliated with 5 to 45-percent tariffs on U.S. goods and expanded it in 2010. Some 99 products were valued at $2.4 billion by the U.S. Chamber of Commerce when they were targeted in 2009, 2010 and 2011.
On January 9th, the DOT issued a press release stating that the results from the pilot program was hardly different than US and Canadian based fleets, and due to this, they will allow Mexican trucking firms to apply for operating authority to make long-haul cross-border runs in this country later this year, ending a two decade dispute between Mexico and the US. The decision ends the prospect of a resumption of $2 billion worth of annual retaliatory Mexican tariffs on U.S. agricultural and personal care products and manufacturing goods, ending the threat of resumed tariffs, relieving some of the pressure of the U.S. truck driver shortages and maintaining U.S. trucker safety standards.
Regardless of all of this, the Teamsters Union is still strongly opposing the DOT on this decision, and immediately responded by calling the DOT’s action irresponsible and shortsighted. “I am outraged that the Department of Transportation has chosen to ignore the findings of the DOT Inspector General and is moving forward with a plan to open the border to Mexican trucks in the coming months,” Teamsters union President James P. “Jim” Hoffa said in a statement. The DOT IG report he is referring to concluded that the pilot program constituted was too small a sample size to make such regulatory decisions. The Teamsters Union is also arguing the deal favors Mexican drivers instead of Americans, that although Mexico will allow U.S. truckers access to their highways under the agreement, U.S. Truckers are not excited to enter Mexico, citing safety concerns amid high violence rates.
Only time will tell how this decision will pan out for the American Truck driving industry.
What do you think of the new announcement from the DOT? Let us know in the comments below.
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