Trade agreement may bump area economy
A commercial truck passes inspection, bringing goods across the border into the United States. (IMPERIAL VALLEY PRESS FILE PHOTO)
The agreement, signed by U.S. Transportation Secretary Ray LaHood and Secretaría de Comunicaciones y Transportes Dionisio Arturo Pèrez-Jàcome Friscione in Mexico City, allows Mexican truckers to deliver goods in the States and carry goods to Mexico, a North America Free Trade Agreement provision the U.S. has essentially ignored.
Until now, Mexican trucks could only travel within 25 miles of the border. Mexico had implemented punitive tariffs two years ago out of anger regarding the non-compliance by the States.
“The agreement signed today between the governments of Mexico and the United States to resolve the cross-border long-haul trucking dispute is a major win for U.S. agriculture, American jobs and our nation’s economic prosperity,” U.S. Agriculture Secretary Tom Vilsack wrote in a release.
Mexico will lower existing tariffs ranging on U.S. goods by 50 percent at the start of the program and the remaining 50 percent will be suspended shortly after Mexican trucks are allowed to cross.
Mexican carriers participating in the program won’t be allowed to haul domestic cargo between points within the U.S. Trucks will be required to comply with Federal Motor Vehicle Safety Standards and have electronic monitoring systems tracking compliance.
The U.S. Department of Transportation will review drivers’ complete driving records and require drug testing to be sent to U.S. Department of Health and Human Services-certified labs.
Drivers will also be assessed on their ability to understand English and U.S. traffic signs. The agreement also entails that Mexico will provide “reciprocal authority” for U.S. carriers to make long-haul drives in Mexico.
Vilsack wrote in the release that the agreement will help expand jobs on both sides of the border. The cross-border long-haul trucking dispute has cost U.S. business more than $2 billion, and U.S. farm exports of affected commodities to Mexico were reduced by 27 percent.
“For U.S. farmers and ranchers, the lifting of these tariffs means jobs and fiscal relief — lifting constraints on American products, removing barriers to trade with a key trading partner, and putting Americans back to work at a time when U.S. agriculture is setting record export figures,” Vilsack wrote.
Mexico bought $14.5 billion of U.S. farm goods in 2010 and is the United States’ third-ranked trading partner. Exports to Mexico are up nearly a quarter in 2011.
“Today’s agreement will allow America’s farmers and ranchers to continue to lead the way to America’s economic recovery. U.S. agricultural exports alone will support more than 1.1 million jobs in America this year,” Vilsack wrote. “And strong U.S. farm exports will be a key contributor to building an economy that continues to grow, innovate and out-compete the rest of the world.”
Border Trade Alliance President Nelson Baldido said an anticipated increase in border crossings could positively impact the area economy.
“For the Valley itself, it’s an economic impact, because you may have people staying overnight in Calexico that weren’t staying there before and people eating in restaurants that weren’t eating there before,” Baldido said.
He added there could be more competition that would result in better pricing for shipments of goods and services.
Teamsters, however, do not see the agreement positively, and Teamsters President Jim Hoffa issued a statement condemning the agreement.
“Opening the border to dangerous trucks at a time of high unemployment and rampant drug violence is a shameful abandonment of the DOT’s duty to protect American citizens from harm and to spend American tax dollars responsibly,” Hoffa said. “It erodes our national security. It endangers motorists. It ignores the rampant corruption among Mexican law enforcement. It lowers wages and robs jobs from hard-working American truck drivers and warehouse workers.”
Baldido said that criticisms such as those are simply “protectionism of their labor.”
He believes that job creation on both sides of the border will help divert people from resorting to crime and that the quality of equipment and labor used by Mexican trucking companies is high.
Bill Polkinhorn, a customs broker and freight mover based in Calexico, said while there may be an economic boost in the area, it will be slight since most large Mexican carriers from the interior of Mexico tend to go through other ports of entry.
Tim Kelley, president and chief executive officer of the Imperial Valley Economic Commission, said the change could create a better flow of traffic and any “opportunity for more trade is going to be beneficial to Imperial County.”
Calexico Economic Development Commission Chair Alex Perrone agreed.
“It’s going to create jobs on both sides of the border,” he said. “There will be more traffic and jobs. It’s just going to help out a lot of logistics.”
Staff Writer Chelcey Adami can be reached at 760-337-3452 or email@example.com