US-Mexico Trucking Deal Agreement Nearing

To study up on the latest development in the US-Mexico cross-border trucking negotiations, I went to the BBC. With diplomatic and speculative tones, the Beeb’s coverage tells me that progress has been made, but the hammering and ironing are still left to be done. (see previous coverage on this topic by Hanson Marketing here and here).

I gathered as much by the tentative choice of words in the opening sentence of the BBC dispatch: “The US and Mexico have reached a proposed deal to open US highways to Mexican trucks, raising hopes of an end to a 20-year dispute”.

Progress is progress. If the logistics companies based along both sides of the US-MX border can pencil out a business case for revenue growth in these lean times, we’ll see expansion from both directions in the coming months. Even though the US holds the upper hand due to its sector size and political influence, this is an equal opportunity for growth in both countries.

Challenges to be faced by both US and Mexican truckers include the rising cost of fuel, the crazy-long delays at the San Diego-Tijuana border crossing, the world’s busiest land crossing. Trucks idling while delayed on both sides burn that costly fuel and create a haze of exhaust fumes, a health hazard for residents and workers in the vicinity.

World's Busiest Land Border Crossing: Expansion Officially Underway in Tijuana-San Diego

Just in time comes news that ground is broken for the border crossing expansion project; read more in the San Diego Union-Tribune.

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Border Governors Conference: US-Mexico Relations

Santa Fe, New Mexico is site of the latest in a series of Border Governors Conferences, taking place right now. Hosted by Governors Schwarzenegger (CA) and Richardson (NM), the governors of US and Mexico border states – Arizona, Baja California, California, Chihuahua, Coahuila, Nuevo Leon, New Mexico, Sonora, Tamaulipas and Texas – are hashing out vital issues tied to Border Security, Economic Development and Energy.

Why is this referred to as an “interim” conference? Read more at Wikipedia and here. (Hint: the conference was originally to be hosted by the governor of Arizona.)

The only problem is that 3 of the 4 US state governors are no-shows… Govs. Brewer of AZ and Perry of TX, lodging a counter-protest; and Gov. Schwarzenegger, with schedule conflicts. So – the teeth were kind of pulled out of this event right there.

Why should we listen when these six Mexican and four US governors talk? Because their 10 Border States represent a joint economy that ranks third in the world. And, with 42 different ports of entry, the region also represents one of the most dynamic trade and border crossing regions in the world.

Gov. Schwarzenegger is the state’s A-List deal maker; his recent trip to China resulted in preliminary agreements with Chinese suppliers for a high-speed, north-south rail link for the Golden State. (just as in the 19th century, China again contributes to Western US rail expansion… this time through infrastructure technology!) And, Gov. Richardson just secured a grant from the Economic Development Administration (EDA) targeting expansion of cross-border commercial rail service between New Mexico and Nuevo Leon (and he was Pres. Obama’s early nominee for Secretary of Commerce). Read previous Nitty Gritty Marketing posts on EDA here and here.

Tariffs Among NAFTA Nations Not Dead Yet

As previously featured on this blog, trucking rights for Mexican companies in the US has been NAFTA’s most-enduring hot potato issue, since its ratification 15 years ago. This is tied into the US’ non-compliance with NAFTA’s international trucking provisions. While US companies already operate freely in Mexico, the inverse has not yet come to pass.

A recent editorial in Wall Street Journal relates that “The newest USA products on Mexico’s list face tariffs of 5 to 25 percent, up from zero or near zero under NAFTA. The higher tariffs likely will eliminate the Mexican market for the affected U.S. companies that export to Mexico. Washington state apples and California oranges and pistachios, among other things, will now cost 20% more in Mexico than they did last week. Cheeses from California and Wisconsin now face a 25% tariff. In all, the current round will hit products exported to Mexico from 43 states, with Delaware, Mississippi and South Dakota added to the list… Mexico’s revised tariff list adds products and subtracts others from the initial list to keep the affected imports at basically the same level. But the net number of U.S.-made products rose by 10”.

The Bush Administration in 2007 (reluctantly, it appears… NAFTA provisions called for it in 2001) launched a pilot program to allow a limited number of Mexican long-haul trucks into the U.S. and test their safety. The program demonstrated that Mexican trucks are as safe as their U.S. counterparts. However, the pilot program was canceled in 2009.

Credits and read more:
– Nitty Gritty Marketing,“NAFTA Wink-Nudge Stalls Mexico’s Trucking in US”

Houston Chronicle coverage

Wall Street Journal, “The Teamster Tariffs”

It’s World Trade Week!

As you read this, about 31 million Americans are at work in jobs that are directly supported by international trade. Nearly one in every five U.S. jobs are linked to exports and imports of goods and services.
Contrary to popular belief, the United States remains the world’s largest manufacturer. Since NAFTA was launched, U.S. manufacturers have boosted their output by more than 50%; U.S. factories account for over 20% of the worlds manufacturing output. Indeed, in California alone, more than 700,000 jobs are supported by the $117 billion in manufactured exports from the state to the rest of the world.

This week-long observance of the absolute relevance of international trade to the US economy began in 1926 – like today, a most notable period of economic angst and isolationist leanings. The idea was hatched by the Los Angeles Chamber of Commerce, who sought ways to promote growth for the booming southern Cal region and the new Port of Los Angeles.

Hat’s off to the resourceful folks at the US Chamber of Commerce whose website, TradeRoots.org, is chock full of trade data.

This month, the southern Cal region is still on it. In the remaining days of May, there will be gatherings in Santa Ana (Mexico Trade Outlook) and downtown LA (The Americas Business Forum) featuring some progressive, hard-working teams of government and trade officials. I will attend both, and will let you know how they go!

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