DOT Floats Proposal To Resolve Trucks Dispute To Mexico, Congress

Posted: January 6, 2011, Inside U.S. Trade

U.S. Transportation Secretary Ray LaHood today (Jan. 6) shared with Congress and the government of Mexico an initial concept document outlining a new Mexican trucking program that the Department of Transportation (DOT) appears to believe will bring the U.S. into compliance with its obligations on trucking services under the North America Free Trade Agreement (NAFTA).

In a press release, the DOT states that the proposal satisfies U.S. “international obligations,” which is a possible reference to the fact that the U.S. failed to open its market to Mexican trucking services under NAFTA as originally promised. As a result, Mexico has raised retaliatory duties against U.S. exports.

However, DOT also cautions in the release that this initial concept document is a “starting point in the renewed negotiations with Mexico,” and that the specifics of the program still need to be developed. It states that a formal proposal, which the public will be able to comment on, will be announced in the coming months.

While the U.S. never fully opened its market to Mexican trucking services, it did maintain a trucking pilot program that allowed for limited access of Mexican trucks. When Congress cut off funding for that program in 2009, Mexico first instituted the retaliatory tariffs due to the U.S. failure to comply with its NAFTA obligations.

Mexico has retained the retaliatory tariffs ever since, and last summer altered the list of duties facing higher, retaliatory tariffs to cover sensitive U.S. products such as dairy products, pork and apples. The Obama administration had signaled it would move forward with a solution swiftly after the November elections.

Sources have charged that the administration wanted to hold off on a solution until after the elections for political reasons, as some U.S. unions, such as the Teamsters, oppose further opening the U.S. border to Mexican trucking services, as they believe Mexican trucks are not safe.

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