Fuel Smarts

Chamber of Commerce: Inaction on Cross-border Trucking Costs Jobs

September 16, 2009

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A new study by the U.S. Chamber of Commerce points to the U.S. refusal to allow cross-border trucking with Mexico as one of the things costing American jobs
.

The study says that by not going through with the pilot program that opened the border to commercial truck traffic, the government caused $2.2 billion in higher costs for U.S. families and companies, $2.6 billion in lost U.S. exports, and more than 25,000 lost jobs for American workers.

"The U.S. has refused to keep its word to Mexico," said Thomas Donohue, president and CEO of the U.S. Chamber, who unveiled the study Tuesday at the Michigan Chamber of Commerce. "How can we call on other countries to meet their obligations under trade agreements if we refuse to meet our own?"

Under the North American Free Trade Agreement, the crossing was supposed to have been opened to border-state traffic in 1995 and to long-distance traffic in 2000. The opening was stalled until 2007, in part by difficult negotiations with Mexico, but mainly by the legislative and legal tactics of U.S. labor, owner-operator and citizen advocacy groups who fear loss of U.S. jobs to Mexican drivers and argue that Mexican trucks will not be safe.

The pilot program, which went into effect September 2007, involved up to 100 trucking firms from Mexico transporting international cargo beyond the commercial zones along the U.S.-Mexico border. Mexico also allowed up to 100 U.S. trucking firms to do the same. On Aug. 4, 2008, the program was extended for two years, but when President Obama signed the Omnibus Appropriations Act into law in March 2009, funding for the program ended, due to safety concerns.

Mexico retaliated by imposing penalty duties on $2.3 billion in imports from 89 products from the U.S., with an immediate duty cost of about $421 million.

"We further estimate that the impact on U.S. employment of the failure of the United States to implement the trucking provisions of NAFTA coupled with Mexican retaliation equals 25,600 jobs," the chamber study said.

Teamsters General President Jim Hoffa spoke out against the study's findings Wednesday, saying that Mexico should be held responsible.

"The chamber gets it exactly wrong on several levels," Hoffa said. "First, it's NAFTA that cost at least a million U.S. jobs. Second, Mexico imposed tariffs that are manifestly excessive, and that's a violation of trade rules. It's outrageous to blame the United States government for Mexico's disregard for U.S. highway safety standards as well as trade agreements."

According to the Teamsters, a total of 118 trucks participated in the pilot program, making 1,443 trips past the restricted border zone.

"It's ridiculous for Mexico to claim that 118 trucks accounted for more than $400 million in trade in 18 months, and it's just wrong for the chamber to claim that keeping the border closed cost U.S. jobs," Hoffa said. "If the Mexican government wants our border opened to its trucks and drivers, then it can live up to its responsibility to make sure those trucks and drivers meet U.S. highway safety standards."

The complete study, "Trade Action - or Inaction: The Cost for American Workers and Companies" is available at www.uschamber.com/trade.

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