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Produce groups say DOT should move forward with Mexican trucking pilot

by Joan Murphy | May 18, 2011

WASHINGTON — Produce groups praised an Obama administration proposal to launch a pilot program that would allow Mexico to conduct cross-border trucking, saying it would begin the process of lifting damaging sanctions to the fruit and vegetable industry.

Earlier this year, U.S. and Mexico officials reached an agreement that would end the retaliatory tariffs that Mexico slapped on a range of U.S. products after Congress halted a Mexican trucking program provided for under the North America Free Trade Agreement.

The Department of Transportation proposed the trucking pilot April 13 after lengthy negotiations with Mexico officials and asked stakeholders to comment on the pilot by May 13.

“The pilot program proposed in this notice will begin the process of lifting the sanctions affecting the U.S. economy,” Bryan Silbermann, president and chief executive officer of the Produce Marketing Association said in May 12 comments to the U.S. Department of Transportation.

“It addresses safety standards so there can be no claim that this pilot endangers the safety of U.S. roads and citizens,” Mr. Silbermann said, adding that the multi-state pilot permits only those carriers that have demonstrated a sufficient commitment to safety, so it protects U.S. highways while facilitating increased trade and economic opportunity.

The National Potato Council, one of the commodity groups hard hit by the retaliatory tariffs, said that the 20 percent tariff on U.S. frozen potatoes to Mexico reduced exports by 49 percent from March 2009 to July 2010 and resulted in a drop of $53 million.

The tariffs caused layoffs in the potato-processing sector while Canada doubled exports to Mexico, John Keeling, executive director of the National Potato Council, wrote in a May 12 letter.

Mr. Keeling favors the new pilot program because a Mexican carrier would not be allowed to pick up a load from a U.S. city and deliver it to another U.S. city and take away U.S. jobs.

Another group hurt by the retaliatory tariffs, the California Table Grape Commission, said that the pilot program will provide “a clear path forward to ensure U.S. compliance with NAFTA obligations and restores duty-free access to the Mexican market.”

U.S. table grape shipments to Mexico fell 70 percent, with a loss of $60 million, after the industry implemented the tariffs in 2009, said Kathleen Nave, president of the California Table Grape Commission. Sales rebounded somewhat after the tariffs dropped to 20 percent from 45 percent in 2010, but sales still were almost 40 percent lower than 2008, she said.