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Obama discusses Mexican trade dispute, but tariffs continue

by Joan Murphy | August 12, 2009
WASHINGTON -- President Obama pledged to resolve the Mexican trucking dispute when he met Aug. 9 with Mexican President Felipe Calderon in Guadalajara, but advocates for lifting the hefty tariffs say that more needs to be done.

President Obama committed to resolve the issue and to address safety concerns about the trucks raised by the U.S. Congress, an administration official told Bloomberg News after the two leaders met during a summit of North American leaders.

Despite the increase attention on the issue, the Obama administration is going to have to jump through many more hoops to convince Congress to allow the pilot program to go forward and Mexican officials to rescind the tariffs.

"Even if the two presidents discussed the program, we still have to see a formal plan for how it will be implemented," said Allison Moore of the Fresh Produce Association of the Americas. "We also have to make sure that Congress doesn't pass legislation unfunding a plan, as has happened in the past."

In March, Congress cut off funds for a pilot program that allowed some truck access into Mexico, prompting Mexico to slap more than $2 billion in tariffs on U.S. goods. The produce industry has been hard hit by the tariffs that rose up to 45 percent on fresh grapes. Mexican officials said they may increase the number of products on the hit list if the first round does not work.

Mexican officials argued that cutting off funding for the pilot program violated the North American Free Trade Agreement, which allowed Mexican trucks access to U.S. roads to deliver goods. U.S. unions are fighting the measure, saying the trucks are unsafe.

U.S. Rep. Peter DeFazio (D-OR), one of the leading critics of the program, said that Mexican trucks pose a serious threat to U.S. highways because of that Mexico's less stringent regulations on hours-of-service, vehicle safety, driver training and licensing.

According to news reports, Transportation Secretary Ray LaHood is circulating a set of core principles to which he hopes top Mexican officials and U.S. lawmakers can agree in order to break the impasse.

Last month, Congress took a small step in addressing the issue. A Senate committee passed a funding bill for the Department of Transportation that encouraged the two countries to agree to re-establish a Mexican trucking program if safety standards are met.

"The committee urges the administration to work expeditiously with the Mexican government to establish a proposal to implement a cross-border trucking program that maintains the safety of our roads and highways and enhances the efficient movement of commerce," said the fiscal 2010 funding bill.

"That language doesn't actually accomplish anything," said Ken Barbic, Western Growers Association's director of federal government affairs.

The new language in the Senate committee-passed bill is part of a committee report and does not require DOT to act, Mr. Barbic said, adding that he fears Mexico will not agree to end the tariffs if U.S. officials offer a program that's "not close to the original demonstration project."

He added, "We're glad to see the issue is getting more attention. But until some action is taken, it doesn't help us."