Back in 1994, during the first term of the Clinton Administration, the North American Free Trade Agreement was signed. One of the goals of the NAFTA pact was to facilitate cross-border trucking between the United States and Mexico, with the anticipated result being an increase in trade between the two countries. For those wondering how well that program has worked, the answer is simple: We don’t know, because despite it being 17 years since NAFTA was signed, cross-border trucking still hasn’t been implemented.
Mexico is the second biggest export market for the United States (after Canada), and more than 70% of all trade between the two countries crosses the border by truck, according to the American Trucking Association, which has long championed the NAFTA trucking provisions. However, the ATA, which represents the U.S. trucking companies, has been at odds over this cross-border issue with the International Brotherhood of Teamsters, which represents U.S. truck drivers. The Teamsters insist that allowing Mexican truckers into the United States would put U.S. trucking jobs at risk, an assertion that is echoed by the Owner-Operator Independent Drivers Association (OOIDA), which represents independent truckers.
So, as the various political parties have waxed and waned in Washington over the past nearly two decades, NAFTA has become a political football, particularly when it comes to implementing the cross-border trucking provisions. A short-lived pilot program was launched towards the end of George W. Bush’s Administration, but was promptly cancelled soon after President Obama took over the White House in 2009.
Frustrated by the Obama Administration’s perceived unwillingness to honor the NAFTA provisions, the Mexican government responded by placing tariffs on several billion dollars worth of U.S. goods, largely food products. As a result, numerous U.S. industries saw their exports—and consequently, revenues—drop sharply due to Mexico’s retaliatory tariffs, to the tune of half a billion dollars.
One of the consequences of the mid-term elections is that the House of Representatives is now under Republican leadership, which helps to explain why President Obama has softened his stance toward Mexican trade. Also, while Obama’s policies, by and large, have been quite union-friendly, the threat of possible job losses by U.S. truckers was superseded by the actuality of $500 million in lost revenues by other U.S. industries. After all, food and chemical producers vote, too.
So it now looks like cross-border trucking will happen fairly soon (“fairly soon” being a euphemism for “within the next year, maybe”), thanks to an agreement reached earlier this month by President Obama and Mexican President Calderón. Once a deal is formally signed between the two countries, Mexico intends to lift 50% of the tariffs, and will lift the remaining half as soon as Mexican trucks are allowed into the United States. As part of the deal, the U.S. Federal Motor Carriers Safety Administration (FMCSA) will require Mexican truckers to use electronic on-board recorders and to comply with U.S. hours of service regulations.
Compliance with hours of service could prove a sticking point, though—not just for the Mexican truckers, but for domestic truckers as well. You see, whereas the cross-border dispute has been ongoing since 1994, the hours of service regulations have been contested since 1962, and some would say they’ve been under fire since their original implementation in 1938.
Recently the FMCSA has proposed shortening the amount of time truck drivers can spend behind the wheel, which of course has been met with loud disapproval from various trade organizations (you can find numerous articles on our website by searching keyword “FMCSA”). Supporters of the proposal say it would result in fewer fatigued drivers on the road and help reduce accidents. Opponents say that it will lead to higher transportation costs and could result in even more trucks being put on the road to make up for the lost driving time.
We took an online poll of our readers and asked you when you thought the hours of service rules would clear all legal challenges. Some thought it might happen within a couple years, but by far the most popular answer, with 54% of the votes, was “probably never.” When it comes to Washington, the only two speeds seem to be “neutral” and “reverse.”
