Houston Truck Deals reports on the imminent cross border trucking deal with Mexico.
The Mexican cross border trucking deal is likely to come into force within the next few days, according to U.S. Trade Representative Ron Kirk. US exporters to Mexico are happy with the prospect of a lifting of the cross border trucking ban – the retaliatory tariffs levied by the Mexican government has created havoc. The cost to US businesses and the economy has been put at over $7 billion a year in tariffs, however the cost in terms of business disruption and loss of Mexican market share has cost S industry even more.
First, let’s put this in to perspective.
In 2010, the United States exported $163 billion to Mexico and manufacturers and producers have had to bear the brunt of the cost of the cancellation of the previous trucking deal. In addition, the US runs a trade deficit with Mexico – over $229 billion of goods are imported from Mexico to the US, and the tariffs imposed upon US industry and agriculture have been making narrowing that trade gap increasingly difficult.
The impact on US exporters was magnified beyond the steep tariffs themselves because the Mexican government randomly rotated the target of the levies. One month wine would be hard hit but pork bellies may be adversely taxed the month after. This random application of tariffs across a very broad range of US goods made it impossible to make appropriate business plans, and the cost to US companies is far greater than the tariffs themselves.
The counter arguments from the US trucking industry are compelling.
The US economy is only now recovering from the worst recession in over 60 years. The industry is in an exceptionally fragile state though it is recovering well. Job losses have been heavy in the US trucking industry but 200,000 new driver positions are expected to be created this year. This volume of job creation is essential if the record unemployment we are currently experiencing is to be reduced (over 9% nationally). Mexican truckers earn around one third of their US counterparts, and will be able to cross the border and haul cargo to final destination anywhere in the US. This is bound to have an impact on the ability of the US trucking industry to generate the much needed jobs here in America.
Road safety is a serious issue and the US and Mexican trucking industries are poles apart. The US has invested heavily in road safety, including the most exhaustive truck driver screening and training system in the world, but the same cannot be said of Mexico. Mexican trucks are simply not maintained to the same standard as their US counterparts and neither are their drivers trained anywhere near to the same standards. Rubbing salt into the wound is that part of the deal is the US taxpayer will pay for EOBRs to be fitted into Mexican trucks, though how far that is going to go to improve safety is anyone’s guess.
Unfortunately, as Kirk makes clear, the US Mexican cross border trucking deal could be in place within the next few days. This means by the time you read this Mexican trucks could already be hauling across the United States.
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