18 March 2009

Mexico Raises Stakes on Trucking

This article is excerpted from the 17 March 2009 edition of “The Journal of Commerce”.

The long battle over allowing Mexican trucks to haul freight throughout the U.S. has taken an ominous turn with Mexico's announcement that it slap retaliatory tariffs on 90 U.S. industrial and agricultural products.

It's ominous because of the timing, which coincides with a recession-fueled rise in protectionist sentiment worldwide….

… Since taking office, Obama has avoided protectionist talk. He said last week that a top
priority was "making sure that we're not dropping back into protectionism" -- something that most economists say would worsen the global economic crisis.

The current spat over cross-border trucking puts Obama in a difficult spot. It comes just as he prepares to head to London for an April meeting of G-20 nations, where his every action will be scrutinized for his commitment to free trade.

The Obama administration has pledged to work with Congress to create a new cross-border trucking program that addresses safety concerns raised by the Teamsters union and others.

Mexican officials doubt that anything will ever make their country's trucks safe enough to satisfy Teamsters. Mexican officials want the U.S. to follow NAFTA, which already is in place.