The Issue

With a few exceptions, Mexico-domiciled motor carriers are limited by law to operating in specified commercial zones along the southern border of the United States.

In February 2007, the U.S. Department of Transportation (DOT) announced a year-long cross-border pilot program that would allow up to 100 Mexico-based carriers access to all U.S. highways, and in return, 100 U.S carriers would be allowed to haul loads into Mexico. The decision was cited as a requirement to fulfill trucking provisions agreed to in the North American Free Trade Agreement (NAFTA). However, despite unfulfilled regulatory obligations for safety and national security along with legislative directives to stop the program, the DOT moved forward with the program on September 6, 2007.

OOIDA opposes the pilot program because the DOT has not fully demonstrated that Mexico-based trucking companies will be held to the same safety and security standards as their U.S. counterparts. Mexico-based drivers and companies as a whole are not as safe as those in the United States because Mexican regulatory standards are not as stringent or as strictly enforced as U.S. standards. For example, Mexico has lower qualifications for acquiring commercial drivers licenses, no certified drug and alcohol testing centers and less enforcement of hours-of-service regulations. All of this presents an enormous danger to all highway users should the program continue under these circumstances.

Also, due to these significantly lower regulatory burdens, Mexico-based motor carriers have far fewer compliance costs. This means Mexican companies and drivers operate for much less costs than U.S. companies and drivers, which allows for a tremendous competitive advantage. This will result in driving down rates and compensation for U.S. owner-operators and drivers.

Although the program was scheduled to end September 6, 2008, the DOT announced a two-year extension of the program on August 4, 2008. According to John Hill, administrator for the Federal Motor Carrier Safety Administration (FMCSA), the main reason for the extension was because very few U.S. and Mexican companies were willing to participate in the program due to the uncertainties surrounding the project’s longevity.

The Status

LEGISLATIVE

On March 11, 2009, President Obama signed into law the “FY09 Omnibus Appropriations” bill. That legislation included a provision that removes funding for the Mexican trucking pilot program, which terminated the pilot program. 

On March 27, OOIDA President Jim Johnston wrote a detailed letter to President Obama and Transportation Secretary Ray LaHood asking them to suspend their efforts to develop a new program at least until Mexico raises their trucking regulations and enforcement efforts to U.S. standards.

On April 1, Jim Johnston met with Secretary LaHood and other stakeholders to express concerns about Mexico’s lack of safety, security and environmental regulations. Secretary LaHood intends to draft a new cross-border pilot program to present it to President Obama.

CANACAR, the largest Mexico-based trucking association, has filed a “Notice of Arbitration” against the United States government for violating trucking-related provisions of the North American Free Trade Agreement (NAFTA). The brief submitted by CANACAR admits that Mexican drivers make significantly less money than U.S. drivers and contends Mexican motor carriers should be able to use that economic advantage in competing with U.S. carriers. They claim Mexican carriers have lost billions of dollars due to the U.S. government’s NAFTA violations. 

On September 7, 2007, OOIDA, filed a Petition for Review and a Petition for Stay Pending Review in the United States Court of Appeals for the District of Columbia. The petition for stay was denied, however, the court asked for a hearing on the merits of the case. The case was transferred to the 9th Circuit Court of Appeals in San Francisco and put on a parallel schedule with a related legal challenge to the pilot program by a group headed by the Sierra Club and the Teamsters (International Brotherhood of Teamsters). Oral arguments in this case were heard on Feb. 12, 2008 in San Francisco. The Association is waiting for a decision to be handed down by the Court.

By working through Congress, OOIDA was successful on a few occasions to step up legal obstacles to the Administration’s efforts including getting both the U.S. House of Representatives and the Senate to include a provision in the fiscal year 2008 appropriations bill to strip funding from the pilot program. The President signed that bill into law, however the Administration is now taking the position that the language in the bill prevents them from establishing new pilot programs and does not apply to the program already in existence. Members of Congress have vehemently disagreed and threatened to bring punitive action against the Administration and the U.S. Secretary of Transportation.

Another related bill was introduced by Congresswoman Nancy Boyda (H.R.1773). That bill passed the House on a vote of 411-3 and is awaiting action by the Senate.

What we can do

Members and citizens should contact their U.S. lawmakers to thank them for the decisions they’ve made so far in keeping safety a priority over economic interests, and ask them to remain firm in demanding that Mexico-based carriers be held to the same high standards as those in the United States. The number for the Capitol Switchboard is 202-224-3121.