Monday, February 22, 2010

Mexican Trucking Retaliation To Continue... Indefinitely

The last time we checked in on the US-Mexico trucking dispute, it appeared that the countries were inching closer to resolving the illegal ban on Mexican trucks that was costing American exporters $2.4 billion in retaliatory tariffs per year.  However, at the time I cautioned that "the near-term resolution of this boondoggle remains far from certain."  Now comes news from Inside US Trade (subscription) that my hunch might actually have been too optimistic:
In an interview with Inside U.S. Trade, a top Mexican trade official said late last week that Mexico will continue to impose retaliatory duties on U.S. exports to its market until a dispute over access for Mexican trucking services to the U.S. market is resolved. The official added that a resolution likely must do more than reinstate a limited pilot program that was gutted by the U.S. Congress last year....

“The [Mexican retaliatory] measures are there, and they will be there until this [trucking dispute] is resolved,” [Mexican Under Secretary for Trade Beatriz Leycegui] said in the interview.

She signaled that a resolution has to do more than simply revive the trucking pilot program, which provided for only limited access for Mexican trucks. The two sides “have to work on something that provides us greater certainty than what we had in the past,” she added, referring to the pilot program....

Leycegui declined to comment directly on whether Mexico could lift its retaliation even if the U.S. offers something less than the full market access for trucking services to which the U.S. agreed under the North American Free Trade Agreement (NAFTA).

According to Leycegui, U.S. Trade Representative Ron Kirk did not provide any proposal for a negotiated solution during his visit to Mexico last week, nor did he offer a concrete date by which the U.S. would get back to Mexico with a proposal, she said.

However, the U.S. will start consultations with Congress and private-sector stakeholders to discuss possible options “very soon,” and Mexico expects to have news from the U.S. government very soon as well, she said....

While Mexico retains the right to modify its retaliation list, Leycegui signaled that Mexico is not currently focused on this possibility. At this point, “we think it is prudent to wait until we see some sign from the U.S. in the following days and weeks,” she said....

Jim Hoffa, general president of the International Brotherhood of Teamsters union, on Feb. 16 said that his organization would work to keep the U.S. border closed to Mexican trucks. “We got the border closed to unsafe Mexican trucks and we’re keeping it closed. The Teamsters did that, nobody else did that -- the Teamsters did that,” he said in a speech to local unions, according to a Feb. 16 press release issued by the Teamsters.
It's hardly big news that the process is moving slowly or that the Teamsters are fighting hard to keep the illegal trucking ban in place.  (Indeed, those two things are closely related!)  Instead, the big news here is the fact that the simple restoration of the status quo ante will probably not be sufficient to end Mexico's massive retaliation against US exports.

If that's really the case and Mexico's not just bluffing, those brutal tariffs aren't going anywhere in 2010.  And US exporters will continue to unfairly suffer so that the White House and congressional Democrats can ensure the election-year support of their powerful supporters, the US Teamsters.

So much for that White House plan to dramatically expand American exports, huh?


pcorn54 said...

Excellent opinion. Cross posting to

We've been fighting against Hoffa and other special interests such as OOIDA, since the Pilot Program was proposed.

Our research and actual feet on the street in Mexico has proven that the oppositions claims of unsafe dangerous trucks and drivers is a smokescreen to mask their protectionist agenda.

And what is strange, the Teamsters represent LTL carriers and drivers, and the freight coming across the southern border is truckload. It has had no effect on American jobs.

But I would venture this. If Mexican law allowed American unions to organize in Mexico, as they do in Canada, Jimbo Hoffa would be a strong proponent of the US fulfilling it's NAFTA obligation

Scott Lincicome said...

Thanks for the compliment and insights. I've been following the NAFTA trucking debacle for a while, so if you're interested you can find plenty more analysis when you click the "NAFTA" label in the post above.