US-Mexico Barebones Document Issued by DOT - Job Losses and Safety at Risk

The US Department of Transportation (DOT) released what it refers to as a "barebones concept document" to act as a starting point for a cross border trucking agreement. Manufacturers and importers already praise the agreement proposals, which come two years after the Obama administration axed a pilot project established by the Bush administration.

Truckers' associations claim the deal will be a job-killer and cite the poor safety record of Mexican operators.

DOT states there are no deadlines at this time, and the purpose of the blueprint is to act as a starting point for discussion. The document outlines in very broad terms, the principals for Mexican truck operators looking to operate in the US beyond the border area, together with the monitoring and inspection regulations to which they would be subjected to. The idea is to provide access to US highways which Canadian operators currently have.

There are some major problems with this.

First: there will be intense political opposition to a deal with Mexico after the Bush administration's scheme was chopped, especially with a lame duck presidency.

Second: while FMCSA and others are busy ramping up safety regulations, there are clear safety issues with Mexican operators in terms of both quality and veracity of safety standards and compliance.

Third: Mexico has imposed dozens of tariffs on US products (almost 100) in direct retaliation for the axing of the previous cross border trucking deal. The Mexican government claimed that the US had violated the North American Free Trade Agreement (NAFTA) to justify the tariffs. Fourth: any deal opening up the US to Mexican-based operators and drivers is going to undercut US operators and lead to a loss in jobs within the industry. Make no mistakes about this; job losses will take place and the safety record of US highways will decrease.

Manufacturers like the DOT proposal document because it will lead to direct cost reduction in operations. The cost savings will emanate from two sources - cheaper logistics and carriage due to cheaper drivers and lower overheads of Mexican operators (some say, at the cost of safety standards). For comparison purposes, the average US take home pay in Mexico is USD $938.35 ($2,855.07 in the US) which is before you even look at big tickets items, like trailers, accessories or trucks for sale. The second cost-saving area will stem from the hoped-for removal of the Mexican trade tariffs on US goods, if a new deal is struck.

Trucker associations, such as OOIDA oppose the proposals because on jobs and safety issues, not least when the US economy and trucking industry is only now starting to recover from the worst recession since the 1920's.


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