William B. Cassidy | Jul 09, 2010 12:46PM EDT
Mexico may expand the list of U.S. products facing billions of dollars in punitive tariffs unless the Obama administration proposes a cross-border trucking program.
A Mexican government official told The Wall Street Journal Thursday that Mexico wants more than the revival of the pilot project killed by Congress last year.
“If we don’t see a concrete proposal from the U.S. in the next few weeks, Mexico will exercise its legal rights,” the unnamed official told the financial newspaper.
Those rights, the official said, include expanding the retaliatory tariffs.
Mexico imposed punitive tariffs on $2.4 billion worth of U.S. goods when Congress and the White House shut down a Bush-era test of cross-border trucking.
The tariffs ranged from 10 percent to 45 percent and affected 90 products.
Mexico is the second-largest export market for the U.S., receiving 12 percent of U.S. exports in 2009. Almost half of Mexico’s imports are sourced from the U.S.
An expansion of the retaliatory tariffs could hit agricultural exports such as corn, rice and beans, the Council on Hemispheric Affairs said in a recent report.
U.S. and Mexican officials have met several times to try to resolve the impasse, most recently when Mexican President Felipe Calderón visited Washington in May.
Transportation Secretary Ray LaHood in May said a cross-border trucking proposal would be ready “very soon,” but the White House hasn’t released a draft.
The debate over immigration policy and fears that violence from Mexico’s war against drug cartels could spill into the U.S. make progress on the issue difficult. And any plan allowing Mexican drivers to deliver freight in the U.S. is likely to face tough opposition with unemployment at 9.5 percent — especially in an election year.
The battle over cross-border trucking with Mexico goes back to 1994, when the North American Free Trade Agreement took effect. Under NAFTA, truckers in the U.S. and Mexico were supposed to have full access to each other’s markets by 2000.
Opposition from organized labor — especially the International Brotherhood of Teamsters — blocked the rollout of NAFTA’s Mexican trucking provisions.
The Bush administration introduced a pilot project in 2007 that let a limited number of Mexican trucks deliver freight beyond the border commercial zone.
Business largely supported the program, but the Teamsters, consumer groups and owner-operators claimed it would lead to unsafe Mexican trucks on U.S. highways.
The Obama administration said in March 2009 it would replace the original pilot project with a new cross-border program, but many Democrats oppose the idea.
A group of 78 members of the House of Representatives, mostly Democrats, in April called for the Mexican trucking provision to be stripped from NAFTA.
-- Contact William B. Cassidy at wcassidy@joc.com.
