A controversial part of NAFTA that permits Mexican trucks to roll through the United States may be left on the cutting room floor if the Trump administration decides to reopen the trade deal.
[Lauren Gardner| February 6, 2017]
And that would suit parts of the U.S. trucking industry, their unions and some avowed foes of the program in Congress just fine.
After decades of fits and starts over implementing the program, the Obama administration made it permanent in January 2015, finally enabling Mexican long-haul truckers to apply to drop off goods past the traditional 25-mile buffer zone. But now, the Trump administration appears poised to reopen NAFTA, and the Mexican trucking program is sure to be a target.
Rep.Peter DeFazio(D-Ore.), the House Transportation Committee's top Democrat, said he plans to bring the issue up to Trump administration officials once they reopen the trade deal.
“I would love to see the provisions that require for that cross-border movement to go away,” he told POLITICO. “The system we have had for decades works great. The Mexicans deal with the crime, they deal with the bribes and they bring the containers to within so many miles of the border, and then a U.S. trucker shows up, hooks up and takes it away — it’s very efficient, and we don’t have to deal with the issues on the other side of the border.”
The International Brotherhood of Teamsters seems to agree. The Teamsters, along with truck safety groups,suedDOT in March 2015, arguing that a report issued by regulators that deemed Mexican trucks safe enough to operate domestically didn’t pass legal muster because of the program’s low participation rate. A federal appeals court will hear oral arguments on the case on March 15.
But before it's decided, President Donald Trump may launch the process to formally reopen NAFTA, the tri-lateral trade agreement among the U.S., Mexico and Canada — and labor interests, industry groups and lawmakers are eyeing the program as a potential casualty.
The Teamsters in particular think they have an “open line of communication” with the administration on the issue, a spokesman said.
The union’s general president, Jim Hoffa, met with Trump before his inauguration and discussed the issue with him, he said. Trump was interested in learning more about the program, and the group sent his team more information.
The labor group isn’t alone in its criticism of the program. Lawmakers in both parties have a long opposed it, and the program's history is pocked with scars from a multitude of battles.
NAFTA, which went into effect in 1994, required the United States and Mexico to allow each other's truckers to deliver goods outside the industrial border zone, hoping to make cross-border truck transportation cheaper and more efficient,according to the Congressional Research Service. To that end, the industry's biggest trade group, the American Trucking Associations, hassupportedthe cross-border requirements.
Without that reciprocity, Mexican trucks must transfer freight to U.S. carriers near the border, which adds time and money to the shipping process. Industry has adjusted to the status quo, with small shuttle operators sprouting up along the border to move goods between Mexican and U.S. carriers.
The Clinton administration declined to act on the mandate. President George W. Bush's administration launched a trial program to expand Mexican trucks’ reach in 2007. But Congress defunded the program in 2009, which spurred Mexico to impose retaliatory tariffs on several U.S. agricultural and manufacturing exports.
The Obama administration negotiated an end to the duties in 2011 by agreeing to a new pilot program, which began in October 2011.
A spokesman for Rep.Duncan Hunter(R-Calif.), an early Trump supporter who has criticized the program, said he expects the issue to bubble up again.
“I think there’s a real issue here for the Trump administration to latch onto especially given the criticism of NAFTA,” said Joe Kasper, Hunter’s chief of staff.
Beyond impacts to U.S. labor and some portions of the trucking industry, one of the most persistent concerns leveled against allowing Mexican trucks into the interior of the United States has been concerns that they aren't as safe as U.S. trucks.
The Federal Motor Carrier Safety Administration under President Barack Obama defended the safety of the pilot program. The agencyinspectedMexican trucks more than 5,000 times, about 1,000 more than regulators initially projected they'd need to do, and accounted for the safety records of nearly 1,000 Mexican carriers that were already permitted to drive beyond the border zone.
Detractors have said the 15 pilot participants don't represent an adequately robust sample to determine its safety. DOT's inspector generalagreedin a December 2014 report, noting that nearly 80 percent of all FMCSA inspections centered on only two carriers.
Federal officials have countered that Mexican carriers were hesitant to join a second pilot program after Congress scuttled the first one.
ATA spokesman Sean McNally told POLITICO the group's backing for the program "is unchanged."
"Trade and trucking are synonymous, and the increased movement of freight yields more good paying jobs and growth in American companies," he said. "We want to help the Administration and Congress build a trade framework that helps grow our economy, including the trucking industry."
As NAFTA stands now, Mexico has a clear right to expect its truckers to be able to deliver goods beyond the commercial border zone, said Brandon Belford, a former DOT official who worked on the Obama-era pilot program.
And while Trump may tout his deal-making prowess, Belford said Mexican trade officials are savvy in their own right.
"I think people should not underestimate the Mexican government’s ability to negotiate and their understanding of the U.S. economy and U.S. political system," Belford said.
FMCSA still accepts applications from Mexican carriers despite the pending court case. According to the Owner-Operator Independent Drivers Association, which intervened in the lawsuit on behalf of the Teamsters, six sought approval from U.S. regulators in 2016.
It's unclear if that number is constrained thanks to the ongoing legal battle over the program.
"The bottom line is that our border with Mexico, it works for commerce, and it has for years," said Todd Spencer, OOIDA's executive vice president. "If it ain’t broke, what are you trying to fix?”