Commodity groups are lauding a U.S. Department of Transportation decision allowing Mexican trucks that meet U.S. standards to permanently deliver goods from Mexico into the United States and haul goods back to Mexico.
The decision ends the prospect of a resumption of $2 billion worth of annual retaliatory Mexican tariffs on U.S. agricultural and personal care products and manufacturing goods.
The Agricultural Transportation Coalition, in Washington, D.C., sent U.S. Transportation Secretary Anthony Foxx a letter, Jan. 19, thanking him for decision. It ends the threat of resumed tariffs, relieves pressure of a U.S. truck driver shortage and maintains U.S. trucker safety standards, Peter Friedmann, the coalition’s executive director, wrote.
It implements a 22-year-old commitment to allow efficient, safe and reliable trucking between the two countries, he wrote.
Mark Powers, executive vice president of the Northwest Horticultural Council in Yakima, Wash., said the decision is good news for Pacific Northwest apple, pear and cherry growers who lost an estimated $80 million or more due to 20 percent duties in 2009, 2010 and 2011. Mexico is the No. 1 export market for Washington apples and pears.
Matt Harris, assistant executive director of the Washington State Potato Commission in Moses Lake, said the decision is a relief particularly as frozen potato products, apples, pears and hay struggle with the longshoremen’s work slow down at ports.
“We lost tens of millions of dollars. It took us several year to crawl our way out of that barrier,” Harris said of the tariffs.
Canada gained about half of the U.S. business of $80 million per year in frozen potato business to Mexico during the tariffs, he said. Now U.S. frozen potato exports to Mexico are $100 million annually and growing, he said.
The U.S. and Mexico agreed to allow each other’s trucks into the interior of their countries to deliver and pick up goods as part of the 1994 North American Free Trade Agreement. Trucks were not to compete with domestic trucking within the country.
The World Trade Organization found the U.S. in violation of the agreement in 2001 for not allowing Mexican trucks and authorized Mexico to retaliate.
Retaliation was averted with a 2007 Bush administration pilot program allowing some Mexican trucks to make deliveries to Chicago.
The Teamsters Union, citing safety and job loss concerns, opposed the pilot program and on March 11, 2009, Congress cut funding, ending it.
Mexico retaliated with 5 to 45-percent tariffs on U.S. goods and expanded it in 2010. Some 99 products were valued at $2.4 billion by the U.S. Chamber of Commerce when they were targeted in 2009, 2010 and 2011.
Washington apples were second only to pork in U.S. agricultural commodities affected. Dairy, grain, potatoes also were hurt. An agreement was reached renewing the pilot program and ending the tariffs in 2011. The pilot program ended in October but the trucks were given provisional authority to continue hauling.
Data collected on 15 Mexican trucking companies in the pilot program and 952 other Mexican trucking companies allowed to haul under pre-existing authority, showed Mexican trucks and drivers met U.S. and Canadian standards, the Federal Motor Carrier Safety Administration said.