Is the Mexico-US Truck Proposal Really Worth It?

04/22/2011 12:41 pm ET | Updated Jun 16, 2011

For Mexican truck drivers, like Bernardo Cervantes, the U.S.-Mexico Truck Border Proposal doesn't just open up the U.S. border, but it also opens up the possibility of making more money through trade.

"This will allow my business, BCH, to maintain at its normal rate," Cervantes said. "I currently drive for three companies, and now I will be able to do more with the loose border control."

If the Mexico- U.S. Truck proposal passes, the U.S. will permit Mexican trucks to drive along U.S. highways. Additionally, Mexico has agreed to cut tariffs on $2.4 billion worth of U.S. products, according to Economy Minister Bruno Ferrari.

"It will definitely be cheaper for us to move products back and forth since the merchandise will be in one set in its delivery," Cervantes said.

The U.S. Department of Transportation recently outlined the proposal, which will be published in the Federal Register and allows the public to comment on the passage of the proposal for thirty days.

U.S. Chamber of Commerce President and CEO Thomas J. Donohue praised the agreement, saying it was time for America to keep its promises and take a first step toward resolving the U.S.-Mexico trucking dispute.

"If we're going to double exports within five years, we must hold on to export markets, such as Mexico, where American companies are already doing well," Donohue

Although Congress still has to vote on the passage of the proposal, President Obama said the United States and Mexico had finally found a "clear path" to resolving the dispute. His words indicate there could be a near future solution to a dispute that has impacted many truckers and businesses.

In fact, according to the U.S. DOT, the extra loading, warehousing, and truck unloading has added $400 million per year to the price of goods. This bill is trickled down to every consumer.

The U.S.-Mexico Truck proposal came into discussions this year after the Chamber of Commerce claimed the long dispute between the two countries was "a national embarrassment and a serious threat to U.S. competitiveness."

The dispute started in March 2009 after Congress terminated the truck pilot project. Mexico responded by imposing punitive tariffs on U.S. exports, as permitted by a February 2001 NAFTA dispute settlement panel. These tariffs range from 10 percent to 45 percent, and they affect $2.4 billion worth of U.S. exports to Mexico.

Yet Donohue said the U.S. Chamber of Commerce is now working to move past the proposal's delay. They plan to get Congress and the administration to live up to the U.S.'s trade agreement.

"This delay put more than 25,000 American jobs at risk, and retaliatory tariffs have been in place for two years on many U.S. products entering Mexico," he said.

To some, this slow implementation of an agreement has not only impacted American jobs and products, but those of the Mexican economy as well.

The Chamber of Commerce said trucking is necessary to maintain the trade partnership, which moves 70 percent of traded goods easily. Indeed, merchandise trade with Mexico quadrupled, from $81 billion in 1993 to $380 billion last year.

The proposal includes a five-step process for any Mexican carrier seeking to operate inside the U.S. There will be an application process followed by a vetting procedure that would require both the Department of Homeland Security and the Department of Justice to sign off on the carrier.

In addition, the proposal would provide Mexican trucks that comply with stringent safety standards access to the U.S. Many said these standards would put many truckers and American concerns on cross-border traveling at ease.

Cervantes said he hopes the proposal will make driving safer for truckers.

"At all times there are so many dangers on the roads," he said. "We need more laws and better prices in fuel and rates for the distances we drive."

Although the 1994 North American Free Trade Agreement was created to open cross-border trucking, there are still numerous concerns the public has on this proposal, including the possibility of decreases in trucking jobs.

"I am both for and against the proposal," said Cervantes, who has owned and managed his trucking business, BCH, for twenty-seven years. "I will be ok, because I have had my customers for a long time. This is not going to effect me, but for somebody else, it probably will."

Cervantes noted the proposal could make it more difficult for him and other truck drivers to make money due to the competition among all truckers who are crossing the border and working for lower rates.

Many opponents of the proposal said they believe it does not protect public safety.

Teamsters General President Jim Hoffa said it is against the proposal. He said the Transportation Department's move shows reckless disregard for American jobs and for public safety and U.S. tax dollars.

"What is it about Mexico's drug violence that DOT doesn't understand?" Hoffa said. "I also question whether DOT officials know that the official U.S. unemployment rate is 8.8 percent. This proposal threatens the jobs of thousands of American truck drivers and warehouse workers along the border."

California Treasurer Bill Lockyer said he has tried to stop the proposal in the past over his concern for the safety issues and its decrease in American jobs.

Texas American Federation of Labor and Congress of Industrial Organizations Spokesman Ed Sills said he believes the proposal would actually outsource more American jobs.

"This would be crossing a line that hasn't been crossed in the past," Sills said. "It is not about Mexico, but it is a larger question of trade policy that has been one sided against American workers."

Sills also explained the proposal crosses a new line as it is leading the public to believe more American jobs and economic activity will increase in the U.S. It would actually take a big chunk of middle cost jobs away.

However, U.S. Chamber of Commerce President Donohue said the proposal would actually increase American jobs at home. He said further delaying the implementation of the proposal would only put more than 25,000 American jobs, like truck drivers, at risk.

For example, according to the Chamber of Commerce, Mexico purchases 12 percent of all U.S. goods sold overseas- this figure is more significant every year with global growth. Thirteen million Mexican migrants make their homes and their livelihoods in the United States, contributing to the strength of the U.S. economy.

Many believe the enactment of the proposal will create more trade between the countries, less stringent tariffs on traded goods, and more economic activity for both the U.S. and for Mexico.

It is likely that the countries will likely sign a formal trucking agreement in June.

In fact, Minister of Communications and Transportation Dionisio Perez-Jacome recently said at a news conference in Mexico City that some tariffs will immediately fall once the proposal is passed.

As uncertainty continues and many governmental leaders, political groups, and truck drivers --like Cervantes -- continue to share their views over the passage of the proposal, the question still remains at to whether or not the Mexico-U.S. truck proposal is really worth it. Still, within time after the proposal is passed, the answer to this question can surely be answered by the general public...