For the twenty years since the start of the North American Free Trade Agreement (NAFTA), the United States failed to fulfill its treaty obligations to open its roads and permit safe cross-border services. As part of the original agreement, Mexican trucks were supposed to be able to operate in four U.S. states—Texas, California, New Mexico, and Arizona—by December 1995, and then throughout the continental United States by January 1, 2000. Almost fifteen years later, the vast majority of Mexican trucks are still not allowed on U.S. roads. Mexico retaliated in kind, blocking the movement of U.S. trucks within its borders. In 2009, Mexico also applied retaliatory tariffs on a yearly rotating basis to a variety of U.S. imports, permitted by a favorable 2001 NAFTA dispute settlement panel ruling.
To try and comply with the treaty’s obligations while also addressing domestic concerns over road safety, the U.S. government developed a series of pilot programs. President George W. Bush launched the first in 2007, enabling a total of twenty-five Mexican carriers to operate roughly one hundred trucks within the continental United States. These pioneers crossed the border twelve-thousand times in the year-long pilot program (for comparison, some fourteen-thousand thousand trucks cross the U.S. southern border alone each day). Although the program was terminated early (precipitating the retaliatory Mexican tariffs), the U.S. Department of Transportation’s evaluation of the program concluded that the Mexican carriers had better safety records than U.S. carriers.
The most recent pilot program began in 2011 and finished this past October. Thirteen Mexican carriers with fifty-five registered trucks crossed the border some twenty-five thousand times during the three year trial period. A joint evaluation by the U.S. Department of Transportation and the Federal Motor Carrier Safety Administration found that Mexican trucks “had safety records equal to or better than the national average for U.S. and Canadian carriers operating in the United States.”
Based on these findings, the U.S. Department of Transportation just announced that the pilot program trucks can continue to traverse U.S. roads, and that all Mexican carriers will soon be able to apply to operate in the United States.
This change benefits the United States (and Mexico) in many ways. First, it will end the $2 billion in retaliatory tariffs against U.S. goods sent to Mexico—second in importance only to Canada for U.S. exporters. When fully operational, it will also reduce costs in terms of money, time, fuel, and pollution for thousands of U.S. companies. Approximately two-thirds of U.S. annual trade with Mexico—roughly $335 billion a year—goes by road.
More broadly, it is a small but important step toward recognizing the importance of North America for America’s future. Facilitating trade will strengthen the economic production platform that increasingly undergirds U.S. competitiveness and economic growth.