March 3 (Bloomberg) — Mexico and the U.S. agreed to end a ban on Mexican trucks crossing the border to operate across the United States.
The agreement, announced today after a meeting by Mexican President Felipe Calderon and U.S. President Barack Obama in Washington, would lead to Mexico dropping tariffs on $2.4 billion worth of U.S. pork, cheese, corn and fruits, the White House said in a statement today.
“We finally have found a clear path to resolve the dispute over trucking between our two countries,” Obama said at a White House news conference with Calderon.
The dispute between the two nations, which have a $393 billion trading relationship, dates to the North American Free Trade Agreement in 1995. U.S. officials have promised on multiple occasions to resolve the standoff.
The U.S. initiated a pilot program in 2007 that let as many as 100 Mexican trucking companies haul cargo into the U.S. It was canceled in 2009 under a provision in a spending bill passed by Congress. Mexico responded by placing retaliatory tariffs on U.S. imports.
Under the agreement today, half the tariffs will be lifted as soon as the deal is signed, and the remainder once the first Mexican truck is allowed to enter the U.S.
All Mexican trucks will be required to have electronic on- board recorders that track compliance with hours-of-service and related laws, according to the White House. In addition, the Department of Transportation will review drivers’ records, ensure they all understand English and require that they are tested for drugs.
Opponents, such as the Teamsters Union, which represents U.S. truck drivers, have said the Mexican vehicles are unsafe.
Under the current system, three haulers are required to ship goods from Mexico to the U.S.: One in each country and a “middleman” hauler operating across the border, raising the costs of Mexican imports into the U.S. by millions of dollars, according to the U.S. Chamber of Commerce.
Business groups called the agreement an important signal that the U.S. is adhering to its obligations under global trade pacts. The U.S. had agreed to allow the entry of Mexican trucks under the terms of Nafta, and panels of judges set up under that accord ruled against the U.S. ban.
‘Lead by Example’
“It’s great that we can lead by example,” said Doug Goudie, director for international trade policy at the National Association of Manufacturers in Washington, in an interview. The deal may take months to put in place, he said.
Independent truckers said that allowing Mexican haulers into the U.S. may drive small trucking companies out of business.
“For all the president’s talk of helping small businesses survive, his administration is sure doing their best to destroy small trucking companies and the drivers they employ,” Todd Spencer, executive vice president of Owner-Operator Independent Drivers Association, said in a statement.
The American Trucking Association said it welcomed the announcement.
“We hope this agreement will be a first step to increasing trade between our two countries, more than 70 percent of which crosses the border by truck,” Bill Graves, the Arlington, Virginia-based trade group’s president, said in a statement. Government rules should “ensure that carriers from both countries are treated equitably.”