Wednesday, September 12, 2012

Status of cross-border pilot program is questionable

A year after the US government finally allowed Mexican trucking companies to conduct long-haul operations into the US, the pilot program may be in jeopardy. So far, only six Mexican trucking companies, most with a single truck, have been approved to participate in the program thus far. As of July, Mexican trucks had made fewer than 100 long-haul trips into the US. This is unacceptable. NAFTA trade has been booming as more manufacturing relocates to Mexico. So it would make sense that many more Mexican trucking companies would be scrambling to take advantage of such growth. What’s the hold up?
The program has come under fire by union officials and large US trucking companies citing such concerns as the possibility of US job losses and the lack of safety and knowledge of Mexican trucking companies as reasons to abandon the program.

These concerns have been raised despite the fact that the NAFTA agreement allowed Mexican truck drivers to enter the US market back in 1995. Due to the lengthy delay in allowing Mexican truck drivers into the US, however, the Mexican government imposed high tariffs on certain US imports; some tariffs were over 20%. Many of these tariffs, were lifted last October when the first Mexican truck was allowed to cross into the US.
The current pilot program is now entering its second year with one more year to follow. Collecting and measuring the data of the program is impossible due to the low rate of participation. If the program fails, Mexico could reinstate high tariffs again.

An audit was conducted from October 2011 to May 2012 and among its findings were problems with the US Federal Motor Carrier Safety Administration (FMCSA) pre-assessments, especially in the area of testing drivers for English proficiency, which is required. The auditors observed three tests and in two of them the drivers were allowed to answer in Spanish. The Office of Inspector General (OIG) recommended that drivers be required to answer in English and that FMCSA test them on 22 traffic signs, rather than a random sampling of four. The agency agreed to make those changes.

Good news this week as a possible seventh Mexican trucking company may be allowed to participate. Public comments are open for ten days and then afterwards the comments will be assessed and the FMCSA will decide what action to take. Let’s hope those that are opposed to this will not stand in the way of free trade.