IT'S TIME TO OPEN THE BORDER

IT'S TIME TO OPEN THE BORDER

You're likely to hear a lot of debate in the coming weeks about President Bush's plan to implement the provision of the North American Free Trade Agreement giving Mexican truckers access to U.S. highways. The ad-ministration made clear last week that it intends to reverse the Clinton policy of denying Mexican trucks access to U.S. roads as promised under Nafta for safety reasons. Some will now claim that lifting the ban will expose American motorists to killer rigs straight out of 'Bladerunner.' Others will preach of the economic benefits owed to the U.S. border states since 1995 when Mexican drivers were originally to have been granted access to Texas, New Mexico, Arizona and California.

The truth is that even if President Bush lifts the ban on Mexican trucks tomorrow, it will matter little. Many believe that development of true cross-border trucking will be as slow to evolve as was the Internet. Companies looking for significant logistics improvements should not look to this decision for much help. And the Teamsters union, which pressured the Clinton administration to keep the ban in place for the past five years, will stand to lose little work for its members. Why?The fundamental reason is the border itself. Even though the United States and Mexico are bound by Nafta, a strong trade agreement, little has been done by the two countries to harmonize their laws and regulations. Mexico and the U.S. are still very different nations. A Mexican trucking company is going to be just as wary as its American counterpart about sending a $100,000 rig deep into what's still for many an unfamiliar and threatening foreign country. The number of problems that could crop up, from breakdowns and detentions to issues of driver safety, are too numerous to incur the risk that the unit will end up out of commission for weeks or months. Drivers themselves resist working in a country where they don't speak the language.

Another reason that change will be slow is the challenges it poses to existing business practices. The U.S.-Mexican trade relationship has been built on the strength of trucking. Some three-quarters of the $250 billion in bilateral trade last year was carried by trucks, and Mexico is now the United States' second largest trading partner behind Canada. Mexico surpassed Japan in 1999. Behind the surging trade relationship are well-established, successful partnerships between U.S. and Mexican long-haul trucking companies. U.S. trailers are regularly interchanged at the border, with Mexican truckers hauling them into Mexico. These arrangements will not dissolve overnight. Consolidation is more likely as some firms seek to gain entry to Mexico or the U.S. by

acquiring a combination of experience and assets rather than attempting expansion on their own.

To the extent that direct cross-border trucking develops, it will happen gradually and involve relatively short trips into the U.S. or Mexico. Assuming some opening of the Mexican market occurs for U.S. truckers, they will likely begin making some direct trips to border area plants called maquiladoras. But the industrial areas of Mexico City will continue to be served by Mexican long-haul truckers. Mexican truckers will stick to border states, which is why the governors of those four states have been vigorous proponents of lifting the ban.

The most vocal argument against opening the border concerns safety. But the experience of California offers guidance as to how this issue should be evaluated. Mexican truckers are currently allowed to drive nearly 65 miles into California. Yet because the California Highway Patrol has been vigilant in keeping out substandard rigs, Mexicans have learned to adapt. The trucks that enter California are almost always in good condition, and accidents attributed to faulty maintenance or equipment have been few. A Nafta dispute-resolution panel last week affirmed the right of U.S. authorities to enforce their own safety standards on Mexican trucks. There have been problems with Mexican trucks that have entered the limited U.S. border areas where they're currently allowed. But the enforcement has been lacking, something the Department of Transportation said last week won't continue.

The DOT isn't saying when the policy will actually change, nor will it say how much access Mexican truckers will initially be given to the U.S. But it's a policy that's due for a change, finally.

Peter Tirschwell is editor of JoC Week. He can be reached at (973) 848-7158, or via e-mail at ptirschwell

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