NAFTA redo

By Sandi Soendker, EDITOR-IN-CHIEF

For years, OOIDA and others have said that Mexico’s long-haul fleets trucking in the U.S. was a pie-in-the-sky provision in the NAFTA that was so poorly thought out, there’s no way the U.S. should be held to it.

Mexico has disagreed, protesting through the years with retaliatory tariffs.

For more than two decades, the U.S. Department of Transportation has been tasked with finding a way to comply with the trade agreement’s half-baked trucking plan and thereby avoid punishing tariffs.

In July 2011, the U.S. DOT set about it one more time with a cross-border trucking pilot program. The sticking point was – and still is – how to do it and hold Mexican trucks and drivers to the same standards as their U.S. and Canadian counterparts. The pilot program was supposed to demonstrate to Congress and the world that strict oversight could make it work. In 2015, it was declared a success by the agency. Mexico immediately suspended the $2.4 billion worth of tariffs it had slapped on many goods from the U.S.

OOIDA contends that participation in DOT’s pilot program, which ended in October 2014, was insufficient to prove it was a responsible, safe plan. After losing that argument at the regulatory level, OOIDA went to the courts.

The Association specifically argues that Mexico-based drivers should not be permitted to operate in the U.S. “unless and until” Congress amends the laws that forbid operation of commercial motor vehicles by anyone not holding a valid CDL issued under federal standards.

OOIDA’s legal challenge was rolled into a joint lawsuit with the International Brotherhood of Teamsters. The oral argument was heard in April, and the case is pending in the U.S. Court of Appeals for the Ninth Circuit.

Pending here, pending there

As one cross-border trucking lawsuit simmers in the San Francisco court, another OOIDA cross-border suit is seeing some action in the Fifth Circuit appellate court in New Orleans.

This case represents another front in OOIDA’s continued attempts to stop the U.S. Department of Transportation from allowing Mexico-domiciled motor carriers to obtain authority to operate in the U.S. One way OOIDA kept the fight alive has been to look carefully at every single application for Mexican authority for problems.

On Nov. 20, 2015, OOIDA filed a protest to the applications of two Mexico-domiciled motor carriers for permanent operating authority. The protest challenged the authority of FMCSA to grant the access because the agency had failed to establish the Mexico-based motor carriers’ safety performance “through a successful pilot program.”

OOIDA also argued that FMCSA had no authority to permit drivers for Mexico-domiciled motor carriers to operate throughout the U.S. without a U.S. CDL as is mandated by statute.

The agency denied the protest without any consideration of the pilot program argument and instead said a protest could only contest the “fitness” of an applicant. OOIDA moved for reconsideration, arguing that the pilot program did not demonstrate the likely safety fitness of Mexico-domiciled motor carriers, and that the issue of the use of drivers without a U.S. CDL bears directly on the question of their fitness.

DOT denied this motion in March 2016 without addressing OOIDA’s issues. OOIDA then filed a petition to review the denial of the protest in the U.S. Court of Appeals for the Fifth Circuit.

That case heard oral argument May 2 in New Orleans. Paul D. Cullen Jr. of The Cullen Law Firm represented OOIDA and a handful of OOIDA members before a three-judge panel. Dana Kaersvang argued for the DOT.

The court appeared interested in whether OOIDA had standing to appeal the agency’s denial of its protest. Cullen argued that OOIDA proceeded under the proper rules at FMCSA.

The government’s lawyer agreed that the court should hear the merits of OOIDA’s case. Kaersvang then defended FMCSA’s decisions by describing the oversight and procedures that FMCSA put in place. Cullen responded that no matter what the safety precautions were, FMCSA could not proceed because the agency did not perform the pilot program required by Congress. Importantly, it did not have the authority to accept Mexican CDLs in place of U.S. CDLs.

The decision is now pending at the court, with a ruling expected this year.

While the legal challenges continue, the DOT has issued operating authority to 13 Mexican carriers that were part of the pilot program. Since January 2015 agency has accepted applications from other Mexican carriers to conduct cross-border trucking services. While very few have applied, the agency expects the program will permanently terminate the retaliatory tariffs.

“In its efforts to dodge Mexico’s tariff threats, our government has chosen to ignore the lesser standards applied to Mexican trucks and truckers,” said OOIDA Executive Vice President Todd Spencer. “Trucks and drivers must be held to the same standards if they are going to compete with U.S. trucks on U.S. soil.”

Trump makes decision to renegotiate

As the OOIDA and Teamsters were before the Ninth Circuit Court and OOIDA’s case in the Fifth Circuit heard oral argument, the future of NAFTA made big national news.

President Trump has long been firm on pulling the U.S. out of NAFTA. On April 26, after phone calls from the leaders of Mexico and Canada, the White House said Trump agreed not to terminate NAFTA but to renegotiate.

At this time, it’s not clear what the White House wants in the NAFTA redo. OOIDA and others continue to lobby the administration to drop the long-haul program. Based on the president’s past trade, immigration and security promises, Trump could actually find himself agreeing with the U.S. truckers. It was reported by Bloomberg in February that the Teamsters met with Trump about it and said afterwards that Trump “seemed open to the idea” of rejecting Mexican long-haul trucks beyond the commercial zones.

“A NAFTA redo might take away the policy impetus to open the border to Mexican trucks, but it would not take away DOT’s authority to grant permanent operating authority to Mexican carriers,” says Paul Cullen Jr., one of OOIDA’s D.C. attorneys.

Should Mexico insist on cross-border long-haul trucking or impose tariffs, Cullen says the agency could find a way to comply with the pilot program requirements, or it could find a way to get Mexican drivers a U.S. CDL. Or the agency could get Congress to change the statute to allow the Mexican CDL.

On another front, a group of U.S. House Dems led by Rep. Peter DeFazio (D-Ore.) have introduced a resolution that would remove the cross-border provision. The proposal has strong support from OOIDA and other labor and environmental groups.

The plan for moving NAFTA along required that Robert Lighthizer be approved by the Senate as the next U.S. Trade Representative. After a long delay, the Senate gave bipartisan approval May 11.

The next step is an official 90-day notification to Congress and then – let the dealmaking begin. LL