NAFTA-born Trucking Dispute Resolved

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:

https://tomhanson.wordpress.com/2009/08/26/nafta-wink-and-nudge-stalls-mexican-trucking-rights/

https://tomhanson.wordpress.com/2010/09/06/tariffs-among-nafta-nations-not-dead-yet/

https://tomhanson.wordpress.com/2011/03/10/us-mexico-trucking-deal-agreement-nearing/

Read more: http://www.bbc.co.uk/news/world-latin-america-14059115

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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.

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.

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