We welcome the news of resolution that will eliminate tariffs on US goods that are in high demand by shoppers throughout Mexico, while opening up a new market for US transport providers. I first covered the US-Mexico NAFTA Trucking and Tariffs issue for Hanson Marketing’s blog two years ago, and as recently as this March.
It’s a tangled issue. The US teamsters’ union’s dissenting view brings up valid points about concerns over safety, security and loss of jobs. The accord allows Mexican transport companies to serve only from Mexican origin to single US destination (no point-to-point within the US). The producers of agricultural and manufactured goods hail the decision because onerous tariffs will be lifted within the next quarter, which resulting international sales revenue will strengthen employment numbers and add to the US’ goal to double exports between 2010-2015.
The most pragmatic, level-headed info I’ve read on the topic comes from The Christian Science Monitor, whose report raises a moot-point scenario that lowers the tension in the room.
“No Mexican company will invest money to join the cross-border program if their truck drivers can be denied permits after an 18-month trial period, as the accord indicates”, says Refugio Munoz Lopez, director general of Mexico’s shipping chamber. “I see no future with this program,” Mr. Munoz says of Mexico’s decision Wednesday to remove punitive tariffs on $2.4 billion of US exports in exchange for allowing Mexican trucks to cross the border. “The only thing this accord does is give Mexico an excuse to remove tariffs.”
Munoz informs the Monitor that “the tough new security requirements for truckers wishing to cross into the United States make it prohibitive for all but 115 out of 400,000 Mexican trucks“. Meanwhile, I see no reciprocal requirements will be imposed on US transport companies, who wish to offer transnational service.
I view this as export growth prospect for one of the US’ powerful and efficient transport sector, which enjoys many competitive advantages over their Mexican counterparts; and will study the views of trade associations within the next 18 months.
Nitty Gritty Marketing entries on this issue: