At their meeting in Mexico City last week, President Barack Obama and Mexican President Felipe Calderon announced that they are committed to resolve the fight over long-distance cross-border trucking between the U.S. and Mexico,
but could not provide any details on how they would do so.

Obama indicated that he wishes Congress had not pulled the plug on the cross-border demonstration project that the Bush administration set up to test U.S. safety systems under controlled conditions. The congressional vote to cut off funding for the program triggered retaliatory tariffs on U.S. products going into Mexico.

"I have said repeatedly that I'm in favor of free trade," Obama said. "I know that there has been some concern about a provision that was placed in our stimulus package related to Mexican trucking. That wasn't a provision that my administration introduced, and I said at the time that we need to fix this because the last thing we want to do at a time when the global economy is contracting and trade is shrinking is to resort to protectionist measures."

He said U.S. and Mexican officials are working to resolve the matter. "I'm hopeful that we can resolve it in an effective way. It's not helpful to a number of U.S. producers who are interested in selling into Mexico and are fearful that they may be subject to countervailing tariffs or retaliation. So we're going to see if we can get this fixed."

In response to the same question, Calderon appeared to defend Mexico's imposition of tariffs and said that he and Obama share the idea that trade produces benefits on both sides of the border. "So going beyond the autonomous decisions that every country can take, and the legitimate exercise of the rights that are part of the pacts and agreements that we have in order to protect free trade, I agree with President Obama, we have to go further. We have to go beyond in order to improve trade between both our countries."

The current impasse arose in March when Congress cut off funding for the demonstration project. Mexico retaliated by slapping tariffs on some 90 U.S.-made agricultural and industrial products from 40 states, amounting to about $2.4 billion in trade. It was the latest chapter in 15 years of conflict.

Under NAFTA, 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.

Since March, Transportation Secretary Ray LaHood has been making the rounds on Capitol Hill and among trade groups, looking for a solution. So far, there has been no official indication of what direction the solution might take, although White House Press Secretary Robert Gibbs did say at a press gathering that the White House was working on "a continuation of a demonstration program." It is not clear if that would be satisfactory to Mexico, which has indicated that it wants full implementation of NAFTA.