By Jim Johnston
OOIDA President and CEO
Editor’s note: OOIDA has asked President Obama to suspend any immediate plans to establish another cross-border trucking program. The Association sent a letter March 26 contending that the onus is on the Mexican government to raise its regulatory standards to that of the U.S. and Canada before its motor carriers are allowed full access to U.S. highways.
It’s important that Americans know that NAFTA does not require the United States to make exemptions for safety and security. Here’s Jim’s letter.
On behalf of our nation’s small business trucking professionals, I respectfully call upon you to suspend any immediate plans to establish another cross-border trucking program. That is, at least until the Mexican government and your administration are able to irrefutably ensure that Mexico-domiciled motor carriers, their trucks and their drivers are strictly compliant with U.S. safety, security and environmental standards. Although we admire the administration’s integrity and intent to follow through with our nation’s obligations under the North American Free Trade Agreement, those intentions should not be placed ahead of the well-being of U.S. citizens.
As you know, the vast majority of trucking companies in the United States are small businesses, as 96 percent of all motor carriers have less than 20 trucks in their fleet and 87 percent of motor carriers have fleets of just six or fewer trucks. In fact, owner-operator fleets averaging little more than one truck represent nearly half of the total number of Class 7 and Class 8 trucks operated in the United States. Those small businesses along with other trucking companies and truck drivers based in the U.S. must contend with a consistently increasing regime of safety, security and environmental regulations.
The aforementioned regulations are intended to protect the motorists on our highways as well as the American public as a whole. Those regulations also significantly increase the cost of operations for U.S.-based companies and drivers. Mexico-domiciled trucking companies and drivers simply do not contend with a similar regulatory regime in their home country nor must they contend with the corresponding regulatory compliance costs that encumber their U.S. counterparts. I feel it is also important to note that regulations in the U.S. apply to entire trucking operations who do not have the ability to cherry-pick which trucks or drivers they wish to be regulated such as was the luxury afforded to Mexican operations participating in the recently terminated pilot program.
The Mexican government along with U.S. shipping interests, many of which have Mexico-based operations, have repeatedly and erroneously contended that the cross-border trucking pilot program was necessary to comply with the United States’ commitments under NAFTA. The treaty, however, provides that each party to the agreement has the right to “adopt, maintain or apply any standards-related measure, including any such measure relating to safety, the protection of human, animal or plant life or health, the environment or consumers, and any measure to ensure its enforcement or implementation” (NAFTA, Article 904 ¶ 1) provided that such measures must be applied in a non-discriminatory manner (Article 904 ¶ 3). Thus, one country may not treat service providers from another country any less favorably than it would “in like circumstances” treat its own or another country’s service providers (Articles 904 ¶ 3, 1202 & 1203).
Even though a NAFTA arbitral panel decided in 2001 that the U.S. was in violation of NAFTA for failing to process the applications of motor carriers to operate within the United States, it affirmed the right of the U.S. to “set the level of protection that they consider appropriate in pursuit of legitimate regulatory objectives,” including the “safety of trucking services …” (Final Report, ¶ 298). The arbitral panel did not require the United States to provide “favorable consideration to all or to any specific number of applications from Mexico-domiciled trucking companies, when it is evident that a particular applicant or applicants may be unable to comply with U.S. trucking regulations when operating in the United States.” (Final Report ¶ 300). Under NAFTA, the United States may establish safety standards-related measures and deny U.S. operating authority to Mexico-domiciled trucking companies that are not able to meet those safety standards, even if it determines that no Mexico-domiciled trucking companies are capable of complying with such standards.
For over three decades, OOIDA has worked with Congress, the U.S. Department of Transportation, other federal and state agencies and many industry organizations to improve the safety, security and environmental sustainability of the trucking industry in the United States. Great strides have been made in many areas with the potential for even more gains just over the horizon. OOIDA is very concerned that the lack of similar safety, security or environmental regulations, and compatible and reciprocal enforcement systems in Mexico will result in a significant loss of the hard-won gains that have been made.
For example, truck drivers based in the United States must meet strict requirements to obtain and maintain a Commercial Driver’s License. In addition, U.S. commercial drivers must comply with hours-of-service regulations, meet strict medical qualification standards, submit to random and post-accident drug and alcohol testing and be subject to automatic disqualification for committing driving offenses in both their trucks and personal vehicles.
On the other hand, Mexico-domiciled truck drivers do not have hours-of-service limitations, do not have ongoing medical certification requirements, are not required to undergo similar drug testing, do not have their safety record monitored by any valid, reliable databases and are not subject to automatic disqualification for serious driving offenses in their own country.
Whether or not Mexico-domiciled trucks and drivers can meet our standards is the Mexican government’s responsibility, just as it would be our responsibility to comply with any reasonable safety and environmental regulation Mexico may impose. By all available accounts, Mexico lacks the infrastructure, the resources and the will to effectively promulgate and enforce compatible safety, security or environmental regulations on their trucking industry. Unfortunately, despite the millions of U.S. taxpayer dollars that have gone to Mexico to empower their government to improve the regulatory standards of their trucking industry, Mexico has failed to institute regulations and enforcement programs that are substantially similar to those in the United States.
The primary objective of NAFTA is to ensure that our three nations enjoy the prosperity that would result from the free flow of goods across seamless borders. In order to achieve this end, the agreement seeks to ensure that each country affords the others access to economic opportunity. Under current conditions in Mexico there is little opportunity or willingness on the part of U.S. truckers to compete in Mexico. Until the Mexican government commits to addressing its deteriorated infrastructure, significantly combats the rampant crime within its borders and promulgates regulations that significantly improve the safety of highway travelers, U.S. truckers will be unable to benefit from anticipated reciprocity. Rather, in the foreseeable future U.S. truckers would be forced to forfeit their own economic opportunities while inadequately compensated Mexican truckers, free from equivalent regulatory burdens, take over their traffic lanes.
On behalf of our nation’s small business trucking professionals, I only ask that your administration follow the laws that Congress has put in place to ensure that Mexico-domiciled trucking companies and truck drivers comply with the same level of safety, security and environmental standards that already apply to U.S.-based companies and drivers. That compliance is necessary to make certain the safety and security of U.S. citizens as well as to ensure operational cost fairness for American trucking companies and truck drivers. LL