Q: Can you tell me what’s going on about Mexican trucks being allowed to operate in the U.S.?
I read recently that a federal appeals court had approved the Department of Transportation’s decision to allow Mexican trucks to start operating on U.S. highways. Previously, I understand, Mexican trucks couldn’t cross the border into this country, and all international freight had to be transloaded at the U.S.-Mexico border.
Why has the DOT taken this radical step?
Furthermore, I understand the Mexican trucks don’t have to have the safety equipment U.S. trucks are required by law and regulation to have. The trucking industry and the Teamsters union keep saying this will hurt highway safety in the U.S. Won’t it do just that?
A: Think back 19 ½ years ago to when the North American Free Trade Agreement went into place.
Just to remind you, NAFTA is a trilateral treaty between the U.S., Canada and Mexico aimed at reducing trade barriers in North America. It eliminates or reduces tariff barriers and otherwise promotes commerce among the three signatories. And one of its provisions was to allow the trucking equipment of all three countries full access to the roads of the others.
The U.S.-Canada portion of this agreement has long since taken effect pretty seamlessly, as has a big chunk of the U.S.-Mexican portion. But the trucking operations segment has been stalled between the U.S. and Mexico for all these years. One presidential directive after the next has barred implementation, through three administrations in Washington.
Nominally, the big stumbling block has been highway safety. Mexican laws and regulations are considerably more lax than those in the U.S., and concern has been expressed that truckers from that country will compromise highway safety in the U.S. if they’re allowed to operate. Mexico, naturally, has fought back with its own prohibition against U.S. truckers operating there. So the traffic continues to be transloaded.
Now, there’s some validity to this argument, especially if smaller Mexican carriers — owner-operators and such — start coming across the border. But if you think that’s the main reason trucking interests and the Teamsters object, hey, I happen to own this great bridge in New York City that I’d love to sell you.
I won’t say that highway safety is a matter of complete indifference to truckers and Teamsters. Nobody wants accidents, liability problems and all that. But those are, logically, primarily economic reasons, which is scarcely surprising inasmuch as they’re the reasons of those whose interest in transportation operations is primarily economic. You and I may fret about highway safety on the ground that we and our families are driving on those highways, but carriers and truck drivers are a lot more concerned about the dollars and cents involved.
And it’s the dollars and cents of Mexican truckers being allowed to operate in U.S. that most concerns the trucking interests and Teamsters, and has been responsible for the nearly 20-year delay in implementing this provision of NAFTA. Mexico is a developing country with much lower wages and equipment standards, and so its carriers and drivers can compete in the U.S. on an unequal basis. It may, in other words, take money out of U.S. pockets and put that money in Mexican pockets.
I have to say that the prospect of Mexican truckers operating on the same roads I travel, with outmoded equipment and drivers whose training may be subpar, doesn’t make me feel all warm and fuzzy. Frankly, it’s a bit scary. But when I consider the subpar equipment and drivers I regularly see from lower-end U.S. operators, I think I can control my fear; will it really be that much worse?
The commercial carriers and drivers, though, have another perspective: Mexican competition is going to hurt them. Maybe not all that much, but they’ll feel a sting. And permissible non-compliance by the Mexican carriers with U.S. equipment safety standards would exacerbate that sting, by allowing the Mexicans to avoid the costs of mandated safety equipment that their U.S. competitors must pay.
So that’s where it stands. The DOT finally is trying to implement NAFTA, as seems appropriate for a treaty ratified in 1994. But the same reasons it hasn’t been implemented for so long still stand, and truckers and their allies continue the battle.
Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.