Compromise reached in US/Mexico cross-border trucking   

U.S. President Barack Obama and Mexico President Felipe Calderon announced yesterday that they have come up with a solution that will "allow for the establishment of a reciprocal, phased-in program built on the highest safety standards that will authorize both Mexican and United States long-haul carriers to engage in cross-border operations under NAFTA." Mexico will suspend 50% of its retaliatory tariffs when the new agreement is signed (60 day estimate) and the other 50% when the first Mexican carrier is granted operating authority under the program. President Calderon is wise to make sure we hold up our end of the bargain before taking down the tariffs. Negotiators from both sides are working on a draft agreement that the DOT will review with Congress and put out for public comment. It is unlikely that we will be seeing the benefits of this new compromise any time soon.

While details are still being worked out, at least some components of the proposal are known. Mexican truckers will be required to operate with Electronic On-Board Recorders (EOBRs) that ensure compliance with U.S. hours of service regulations and to ensure that the trucks only haul freight to and from Mexico, not U.S. domestic freight.

The news has been widely reported by the mainstream press including The Wall Street Journal, and by numerous trade magazines including Logistics Management and Transport Topics. The plan is supported by the ATA and the U.S. Chamber of Commerce.

We can expect the usual suspects to contemplate the end of the world as we know it, and OOIDA Executive Vice President Todd Spencer wasted no time in blasting the proposal; "Mexico's economic bullying tactics should not be tolerated. The onus is on Mexico to raise the safety, security and environmental standards for their trucking industry. We should not allow ourselves to be harassed into lowering our standards." It seems to escape Mr. Spencer that the proposal holds Mexican truckers to the same or stricter safety and environmental standards as U.S. carriers. The other half of the unholy alliance against honoring our trade deals, Teamsters' president Jim Hoffa, chimed in to claim the deal "caves in to business interests at the expense of the traveling public and American workers."

Let's hope this proposal moves ahead quickly as I am certain it will provide some productivity and cost savings to manufacturers and retailers that will at least partially offset the rising costs associated commodity inflationary pressure and with tightening capacity in the trucking industry.