Mexico & Nafta - 10 August 2004

The 7 June decision by the US Supreme Court to allow Mexican trucks to use US roads has still to be implemented. Both the US Department of Transportation and the Federal Motor Carrier Safety Administration have to review the decision. This was expected to take at least 30 days, but they still had to issue their findings two months later.

Only once the policy is approved will work start on implementing it. The Transportation Department will then have to start processing the  applications from Mexican haulage companies which want to use US roads and the US and Mexican authorities will have to agree on how the  inspections of Mexican trucks should be carried out. On top of this, John Kerry, the Democratic candidate for the presidency has said he will review all trade agreements. He expects this review to take at least three months. The new rules for Mexican trucks will clearly fall within his review.

Even if Bush retains the presidency, it is unlikely Mexican trucks will be using US roads before the end of the year because of all the administrative decisions that still have to be made. One key issue is working out a way of inspecting Mexican trucks to prevent the increase in the number of Mexican trucks crossing the border leading to an increase in the smuggling people and drugs from Mexico into the US. The problem US border patrol officials face is that too rigorous inspections could be construed as a non-tariff  barrier by the World Trade Organization.  

Just how significant the decision will be for Mexican hauliers is far from clear. Mexican trucks will only be allowed to take loads from a Mexican location to a US one. Mexican trucks will not be allowed to pick up loads from one US location and transport them to another. Mexican trucks are allowed to carry loads from a US location to a Mexican one. Currently Mexican trucks are only allowed to carry goods 20 miles inside the US. What the trucking deal should do is to lower the cost for maquiladoras  supplying US companies. They should not be able to avoid having to offload goods from one lorry to another for onward shipment into the US.