Trucking industry stakeholders react to Mexico's decision to increase tariff list

OOIDA Executive Vice President Todd Spencer says the U.S. government should stand up to what he called Mexico's bullying tactics. (Courtesy OOIDA)

By LYNDON FINNEY
The Trucker Staff

8/17/2010

WASHINGTON — Trucking industry stakeholders on Tuesday continued to weigh in on Mexico's announcement Monday that it would renew the list of U.S. goods subject to increased tariffs, adding that the list would involve 99 U.S. products with similar total export value to Mexico as the previous list.

The Mexican government made its decision in the wake of no solution to the cross-border trucking program killed by Congress in March 2009 and thus what Mexico perceives as a lack of full compliance by the U.S. with the North American Free Trade Agreement.

The embassy said its revised list would be published within five business days.

The original tariffs were estimated to cost U.S. growers $2.4 billion annually.

Tuesday, Owner-Operator Independent Drivers Association Executive Vice President Todd Spencer called on the Obama administration to stand up to what he called Mexico’s bullying tariff tactics and start fighting for the livelihoods of Americans.

“If the U.S. trade representative had called out Mexico for their illegal tariffs more than a year ago, we would not be in this situation,” Spencer. “It is irresponsible to allow it to go on for this long.”

More than 18 months have passed since the tariffs were first imposed shortly after Congress killed the Cross Border Demonstration Project.

“These bullying tactics should not be tolerated. The onus is on Mexico to raise safety, security and environmental standards for their trucking industry,” Spencer said. “We should not allow ourselves to be blackmailed into lowering our standards.”

Trucking companies in the United States are required to comply with ever-increasing safety regulations that significantly increase their costs of operations, Spencer noted, adding that Mexico did not have a similar regulatory regimen and therefore its companies do not contend with the corresponding costs that encumber U.S. counterparts.

Meanwhile, Teamsters General President Jim Hoffa urged the federal government to challenge Mexico's decision to subject more U.S. imports to tariffs because of the ban on allowing unsafe Mexican trucks to cross the border.

Hoffa said the tariffs are excessive and the Teamsters are calling on administration officials, including U.S. Trade Representative Ron Kirk, to challenge them.

"At a time of deepening budget deficits and a weak economy, it would be foolish to subject U.S. taxpayers to such an expensive and very unsafe program," Hoffa said. "Instead of slapping additional tariffs on U.S. goods, Mexico should be living up to its end of the bargain by making sure its drivers and trucks are safe enough to use our highways."

Hoffa has repeatedly said that the ultimate solution to the Mexican trucks dispute is not to open the border but to renegotiate the North American Free Trade Act Agreement (NAFTA).

Monday, a spokesman for the Mexican embassy amplified his country's announcement.

“This is something that has been in the works for months and it was just a matter of time before we announced this decision,” Ricardo Alday told The Trucker. “There’s never a good or bad time to do something like this.”

Alday said the lack of communication from the U.S. government concerning a new cross-border program motivated the Mexican government to move forward with renewing the tariffs at this time.

He said the Mexican government keeps hearing and receiving messages that point to the fact that the Obama administration and Congress are close to coming up with a new program.

“We are waiting for it to happen,” he said. “When and if it happens, we’ll see whether it’s something we can work with.”

DOT spokeswoman Olivia Alair said Monday the U.S. remains committed to working with Congress and Mexican officials to identify a mutually agreeable path forward.

“We believe we can find a solution that both addresses the concerns voiced by some in the U.S. Congress, and keeps us compliant with our international trade obligations. The U.S. Department of Transportation is developing a new proposal that will meet congressional concerns as well as our NAFTA commitments,” Alair said.

Kirk on Monday expressed disappointment with the announcement.

“We are disappointed that the Mexican government has announced its intention to impose duties on additional U.S. products related to the cross-border trucking dispute between our countries,” Kirk said in a prepared statement. “Mexico is an important U.S. export market and President [Barack] Obama understands the economic pain that these tariffs cause for American farmers, companies and workers. Following President Obama’s direction, Department of Transportation Secretary Ray LaHood and I have worked with other agencies and stakeholders in Congress seeking to resolve this issue in a way that addresses safety concerns and upholds our trade obligations. We are committed to continuing to work with Members of Congress and our counterparts in Mexico to resolve the dispute and end these duties.”

“For 15 years, the United States has failed to meet its commitment to Mexico to allow cross-border trucking services, as agreed to in the North American Free Trade Agreement (NAFTA). In March 2009, Mexico retaliated by raising tariffs on U.S. products sold in Mexico. Nothing happened except that U.S. farmers, workers, and businesses lost sales and jobs. In light of the administration’s failure to act, Mexico announced it will impose additional retaliatory measures that will impact a new range of U.S. products, putting more U.S. farmers and workers at risk.”

“Enough is enough,“ he continued. “It’s time for the administration to put forward a solution and end this dispute, the facts of which are not in dispute. The U.S. made a commitment and it must be met. The administration has made it a priority to enforce the commitments of our trading partners, but we have no credibility unless we live up to our side of the agreements. We urge the administration to resolve this issue immediately.”

In the time since the pilot project ended, LaHood has said several times the DOT was very near sending Congress a proposal for a new program.

On May 6, he told a Senate subcommittee that a new proposal was “very close.”

LaHood’s comments came during questioning from Sen. Patty Murray, D-Wash., chairman of the Senate Subcommittee on Transportation and Housing and Urban Development, who has noted the impact of the tariffs on her home state.

Late last month, a “frustrated” Murray said she had included language in the Fiscal Year 2011 Transportation, Housing and Urban Development (THUD) Appropriations bill that calls on the Obama administration to put forward a plan that would end retaliatory tariffs on Washington state agricultural products by Oct. 1.

Mexico first imposed the tariffs shortly after the Cross Border Demonstration Project ended when Congress passed and President Barack Obama signed the $410 billion FY 2009 appropriations bill that contained language ending the pilot project.

“During its 18 months of operation, the cross-border trucking program produced positive results, showing not only compliance by Mexico's long-haul trucks with U.S. regulations but a superb and unmatched safety record,” a statement posted on the embassy website said Monday. “The decision to end the program was never about the safety of America’s roads. It was driven by protectionism, the costs of which are borne by businesses, workers and consumers in our two nations. The result, unfortunately, has been one of lost jobs and higher prices.”

Despite no action by the U.S. to resume a cross-border program, Mexico said it continued to underscore its willingness and commitment “to continue to constructively engage with the administration and with Congress in finding a mutually acceptable long-term solution to this dispute that has burdened our bilateral trade relations for over 15 years.

“Moreover, Mexico will continue to grant access to U.S. trucks into its territory under the same basis of the demonstration program,” the statement said. “Resolving the trucking dispute is crucial to job creation, to the acceleration of the economic recovery of both nations, and the deepening of our trade relations. A seamless operation of cross-border trucking is essential for the competitiveness of our two countries and of the entire North American region in the global market place.”

Lyndon Finney of The Trucker staff may be contacted to comment at editor@thetrucker.com.