Thursday, May 24, 2012

Trucks from Mexico not crossing U.S. border

Last year’s cross-border trucking agreement that ended a contentious trade dispute between the U.S. and Mexico that lasted for 17 years since the North American Free Trade Agreement came into effect, has reportedly yet to see much success due in part to strict vetting procedures on the U.S. side and high insurance costs.

A U.S. Department of Transportation pilot program was officially launched last October after the NAFTA trade dispute between the two neighboring countries was resolved as Mexico lifted trade tariffs in exchange for allowing that country’s long-haul trucks into the U.S.

However, to date, only 33 trucks from Mexico have crossed into the U.S., and the Federal Highway Administration fears there is not enough data to cull from its pilot program to provide sufficient analysis for the potential of a broader cross-border program.

“Participation is not where we want it or need it to be to make it a viable program,” said William Quade, the Federal Motor Carrier Safety Administration’s associate administrator for enforcement and program delivery to Bloomberg BusinessWeek. “The agency is extremely concerned about not having sufficient data,” he said.

A stringent application process for the trucking firms participating in the pilot program that includes a strict safety audit and a period of time allowed for the public to comment, combined with higher insurance costs, has reportedly contributed to the lack of trucking traffic heading into the U.S. thus far.

On the other hand, three U.S. companies have reportedly sent over 2,000 trucks to Mexico since the pilot program was instigated in October.

“If Mexican trucks effectively can’t get into the United States, I’m sure the Mexicans would be tempted to go back to the same retaliation they had under the NAFTA rules,” said Ed Gerwin, trade analysit for Washington D.C.-based research firm Third Way.

For the full Bloomberg Businessweek story: www.businessweek.com

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