Congress Doesn’t Respect Nafta

Arturo Sarukhan is Mexico's Ambassador to the United States
Arturo Sarukhan is Mexico's Ambassador to the United States

Nobody can argue that Mexico hasn’t worked tirelessly for more than a decade to avoid a dispute with the United States over Mexican long-haul trucks traveling through this country. But free and fair trade hit another red light this past week. The U.S. Congress, which has now killed a modest and highly successful U.S.-Mexico trucking demonstration program, has sadly left my government no choice but to impose countermeasures after years of restraint and goodwill.

Then and now, this was never about the safety of American roads or drivers; it was and has been about protectionism, pure and simple. Back in 1995, the U.S. unilaterally blocked the implementation of the North American Free Trade Agreement’s cross-border trucking provisions, just as they were about to enter into force. In response, and after three years of constant engagement, Mexico had no alternative but to request the establishment of an arbitration panel as allowed under Nafta. A five-member panel, chaired by a Briton and including two U.S. citizens, ruled unanimously in February 2001 that Washington had violated the trucking provisions contained in Nafta, authorizing Mexico to adopt retaliatory measures. Yet once again, Mexico exercised restraint and sought a resolution of this issue through further dialogue.

Unfortunately, Mexico’s forbearance only seemed to make matters worse. In 2002, Congress introduced 22 additional safety requirements that Mexican trucks would have to meet, a measure that was clearly discriminatory as these requirements were not applied to U.S. and Canadian carriers operating in the U.S. Mexico worked assiduously with the U.S. administration to find a solution to this problem.

Finally, in 2007 an agreement was reached that included the implementation of a demonstration program in which up to 100 carriers from each nation would be allowed to participate. This program was designed precisely to address the concerns voiced by those opposed to cross-border trucking. The demonstration program, launched in September 2007, was an unmitigated success. During the 18 months that the program was in operation, 26 carriers from Mexico (with 103 trucks) and 10 from the U.S. (with 61 trucks) crossed the border over 45,000 times without any significant incident or accident. Moreover, according to reports of both the Department of Transportation’s inspector general and an independent evaluation panel, Mexico’s carriers participating in the program have a safety record far better than that of all other carriers operating in the U.S.

The demonstration program also underscored the benefits of free and fair cross-border trade, given the lower costs that would result from ending the requirement that short-haul trucks be used to transfer cargo at the border from the long-haul trucks of one country to those of the other. Thus, for example, one participating carrier saved over $600,000 a year by cutting trip times and fuel costs, while another saved an estimated $188,000 in transfer fees in the nine months that it participated in the demonstration program.

These savings benefit consumers and enhance North American competitiveness. Moreover, a streamlined system would also cut pollution, since fewer and newer Mexican long-haul trucks would replace smaller and older trucks that now huff and puff their way to the border. Unfortunately, notwithstanding these benefits to businesses and workers, and to the safety of our roads and the health of our environment, a small but vocal group has consistently blocked progress on this issue. It has now finally managed to stop the demonstration program by defunding it through the 2009 omnibus spending bill.

In confronting this situation, the government of Mexico — after over a decade of dialogue and engagement in which it has asked for nothing more than U.S. compliance with its international commitments and with the rules of the game that provide for a level playing field — has had no alternative but to respond by raising tariffs on 90 U.S. products that account for approximately $2.4 billion in trade. It is worth noting that this takes place shortly after Mexico announced it would unilaterally reduce its industrial tariffs from an average of 10.4% in 2008 to 4.3% by 2013, and that it has underscored its commitment, along with its other G-20 partners, to push back on protectionist pressures.

What has been particularly frustrating in this long and uphill battle has been the fact that the U.S. Congress continues to move the goalposts. Today, opponents within Congress continue to allege concerns related to the safety of America’s roads — yet they cancelled the very program designed to address such concerns, and which had been producing positive results. After all, the cross-border trucking program that was defunded had been demonstrating not only compliance by Mexico’s long-haul trucks with U.S. regulations, but a superb and unmatched record of safety. It is precisely because of our firm belief in the importance of cross-border services that the government of Mexico will continue, as a sign of good-faith and notwithstanding the countermeasures announced early this week, to allow U.S. carriers to provide trucking services into Mexico under the now-defunct demonstration program guidelines and criteria.

Mexico is the U.S.’s second-largest buyer of exports. It remains a steadfast supporter of free and fair trade, and will continue to work actively and responsibly during the coming weeks and months with Congress and the administration to find a solution that will allow safe Mexican trucks onto U.S. roads under Nafta rules.