U.S., Mexico sign agreement to end trucking dispute

U.S. Transportation Secretary Ray LaHood and Secretaría de Comunicaciones y Transportes Dionisio Arturo Pèrez-Jàcome Friscione joined July 6 in Mexico City to sign agreements resolving the dispute over long-haul, cross-border trucking services between the United States and Mexico, according to a statement from the U.S. Department of Transportation.

The new program puts safety first and paves the way for Mexico to lift tariffs it imposed more than two years ago. Pursuant to an agreement signed by the United States Trade Representative and the Secretaría de Economía of the United Mexican States, Mexico will soon lift retaliatory tariffs on more than $2 billion in U.S. manufactured goods and agricultural products, providing opportunities to increase U.S. exports to Mexico and expanding job creation in the U.S. The agreement also provides that Mexico will suspend 50 percent of the retaliatory tariffs within 10 days. Mexico will suspend the remainder of the tariffs within five days of the first Mexican trucking company receiving its U.S. operating authority. As a result, Mexican tariffs that now range from 5 percent to 25 percent on an array of U.S. agricultural and industrial products such as apples, certain pork products and personal care products would be immediately cut in half and will disappear entirely within a few months.

“The importance of today’s action by the United States and Mexico cannot be overstated. For too long this dispute has been allowed to fester and a commitment by both governments to abide by this agreement is an enormous step in the right direction,” said National Potato Council president Justin Dagen of Karlstad, Minn. “The potato farmers of the United States applaud President Obama in his effort to make sure the United States is living up to its trade obligations and look forward to the permanent resolution of the issue and complete elimination of the retaliatory tariffs on U.S. frozen potato exports to Mexico. We intend to work closely with the Administration and Congress to defeat any efforts in Congress to interfere with this important step forward.”

Mexico is the third-largest market for U.S. potatoes. In 2008, the most recent year unaffected by the dispute, U.S. potato growers exported more than $83 million in frozen potatoes to Mexico, according to the National Potato Council. In response to Congressional action to prohibit funding for a cross-border trucking pilot program, Mexico levied $2.4 billion in retaliatory tariffs in accordance with an arbitration panel’s decision in 2001. Frozen potatoes from the United States were initially subject to a 20 percent tariff level on March 23, 2009. The tariff was reduced on August 17, 2010, when the tariff list was rotated to include other agricultural and manufactured goods.

“The agreements signed today are a win for roadway safety and they are a win for trade. By opening the door to long-haul trucking between the United States and Mexico, America’s third largest trading partner, we will create jobs and opportunity for our people and support economic development in both nations. I thank President Calderon and Secretary Perez-Jacome for their leadership and for their partnership as we build a safer, more prosperous future for North America and the world,” Secretary Hood said.

After the previous cross-border trucking program was terminated in March 2009, Secretary LaHood and other Obama Administration officials met with lawmakers, safety advocates, industry representatives and others to address a broad range of concerns, which the Department took into account as it worked with Mexico to develop a new program. The final program published today addresses the recommendations of over 2,000 commenters to the proposal issued by the Federal Motor Carrier Safety Administration in April.

As a result of these meetings, and in consultation with Mexico, trucks will be required to comply with all Federal Motor Vehicle Safety Standards and must have electronic monitoring systems to track hours-of-service compliance. In addition, the U.S. Department of Transportation will review the complete driving record of each driver and require all drug testing samples to be analyzed in Department of Health and Human Services-certified laboratories located in the United States. The department will also require drivers to undergo an assessment of their ability to understand the English language and U.S. traffic signs. The new agreement also ensures that Mexico will provide reciprocal authority for U.S. carriers to engage in cross-border long-haul operations into that country.