US Opens Road Haulage Freight Trade to Mexican Operators

US – MEXICO – The US Department of Transportation (DOT) has opened the door for Mexican road freight operators to conduct long-haul, cross-border trucking services in the United States, following the conclusion of a three year pilot programme which evaluated the safety of Mexican based hauliers to operate on the other side of the border, as part of the Federal Motor Carrier Safety Administration’s (FMCSA) implementation of the North American Free Trade Agreement’s (NAFTA) trucking provisions. Transportation Secretary Anthony Foxx said:

“Opening the door to a safe cross-border trucking system with Mexico is a major step forward in strengthening our relationship with the nation’s third largest trading partner, and in meeting our obligations under NAFTA. Data from the three-year pilot programme, and additional analysis on almost 1,000 other Mexican long-haul trucking companies that transport goods into the United States, proved that Mexican carriers demonstrate a level of safety at least as high as their American and Canadian counterparts.”

Fifteen trucking companies from Mexico enrolled in the pilot that concluded in October, crossing the border more than 28,000 times, traveling more than 1.5 million miles in-country, and undergoing more than 5,500 safety inspections by American officials. Data collected on the pilot carriers, and an additional 952 Mexican-owned trucking companies that also operated long-haul in the US during the same 36-month period under a pre-existing authority, showed that companies from Mexico had violation, driver, and vehicle out-of-service rates that met the level of safety equal to, or better than, American and Canadian operators.

The policy change is expected to result in the permanent termination of more than $2 billion in annual retaliatory tariffs on US goods and ends more than two decades of uncertainty. US Trade Representative Michael Froman welcomed the news, saying:

“I am pleased that the Department of Transportation has published its analysis of its very rigorous long-haul, cross-border trucking pilot programme. The successful conclusion of the pilot programme provides the basis for the permanent resolution to this dispute. We have been, and will continue to work with Mexico to ensure that the threat of retaliatory duties will now be brought to a swift conclusion as well. Formally concluding this process will help us continue our work to expand trade and investment opportunities between our countries.”

In 2001, a NAFTA Dispute Settlement panel ruled the US was not in compliance with the cross-border trucking provisions of the agreement. After a 2009 appropriations bill halted a previous demonstration project, Mexico exercised its option to take retaliatory measures, granted by a NAFTA Arbitration Panel, and imposed more than $2 billion in annual tariffs on exports of US agriculture, personal care products and manufacturing goods.

Mexico suspended the tariffs after the new pilot programme began in 2011, and previously committed to terminate the tariffs permanently when US-Mexican trucking operations are normalised. Companies from Mexico that apply for long-haul operating authority will be required to pass a Pre-Authorisation Safety Audit to confirm they have adequate safety management programmes in place, including systems for monitoring hours-of-service and to conduct drug testing using an Department of Health and Human Services certified laboratory. Additionally, all drivers must possess a valid US Commercial Driver’s License or a Mexican Licencia Federal de Conductor, and must meet the agency’s English language proficiency requirements.

Like Canadian companies that are granted US operating authority, carriers and drivers from Mexico are required to comply with all laws and regulations, including regular border and random roadside inspections. Once the motor carrier is approved, their vehicles will be required to undergo a 37-point North American Standard Level 1 inspection every 90 days for at least four years.

American trucking companies have been able to apply and operate long-haul in Mexico through NAFTA since 2007. Currently, five American companies use this authority to transport international goods into Mexico.