Letter to Congress from 69 Organizations
Supporting the Cross Border Trucking

March 10, 2008

Dear Member of Congress:

The undersigned companies and agricultural and business organizations urge the Congress to permit the full implementation of the U.S. Department of Transportation’s (DOT) Cross Border Trucking Pilot Program with Mexico consistent with U.S. trade obligations under the North American Free Trade Agreement (NAFTA).  We strongly oppose attempts to halt or impede this program, including attempts to restrict funding.  Disruption of the program will come at a considerable cost to U.S. workers, farmers, businesses and consumers.  

Prior to implementation of the pilot program, the United States restricted Mexican trucks entering the United States.  In 2001, a NAFTA dispute-settlement panel unanimously ruled that the blanket exclusion of Mexican trucking firms violated U.S. obligations under the NAFTA.  The ruling gave Mexico the right to retaliate against U.S. products entering Mexico.  It is estimated Mexican retaliation against U.S. products could be as much as $2 billion per year.  Fortunately, Mexico refrained from retaliation.  However, if the pilot trucking program is blocked, we expect Mexico to exercise its right to retaliate.  Retaliation of this magnitude could wipe out a broad swath of U.S. exports to Mexico and related U.S. jobs. 

U.S. food and agriculture are particularly vulnerable to retaliation given the growth of U.S. farm exports to Mexico and repeated calls from Mexico’s agriculture sector for restrictions on U.S. food products. Under NAFTA, U.S. food and agriculture exports have more than tripled, climbing from $3.6 billion in 1993 to over $12 billion in 2007.  Mexico is the top export destination for beef, dairy, poultry, rice, soybean meal and oil, corn sweeteners, apples and dry edible bean exports.  It is also a major market for pork, corn, soybeans, eggs, vegetable oils, cotton, fresh U.S. potatoes, snack foods and other consumer-oriented agricultural goods.

U.S. agriculture is not the only industry vulnerable to Mexican retaliation.  Mexico is an important export market for many U.S. businesses and manufacturers. For example, Mexico is one of the largest export markets for consumer electronics (CE) products produced in the United States.  The CE industry is poised to be negatively affected by any retaliation.  Additionally, Mexico is by far the largest market for U.S.-made yarn and fabric (textiles).  Almost $3 billion worth of U.S. textiles were exported to Mexico in 2007.  Textile exports could be jeopardized by the Mexican retaliation as well as by lack of cross border trucking.

Based on a draft retaliation list obtained in Mexico from a reliable and confidential source, economist Dermot Hayes of Iowa State University has analyzed the potential impact of Mexican retaliation on the U.S. economy.  Hayes found that up to 40,909 U.S. jobs in seventeen states could be lost as a result of the failure of the United States to honor its commitments on trucking. Hayes’ study can be found at http://www.bus.iastate.edu/dhayes/.  

Highway safety has been the main argument against cross border trucking with Mexico. However, Mexico has always assured that its trucks and drivers would comply with U.S. safety standards.  The pilot program ensures trucks meet U.S. safety standards and it requires U.S. inspectors to examine and clear all Mexican trucks on-site in Mexico before they enter the United States.  

We urge you to oppose all efforts to prevent the implementation of the Cross Border Trucking Pilot Program.  We are extremely concerned that further actions to restrict the Mexican truck obligations under NAFTA will lead to Mexico’s retaliation against U.S. exporters and workers.

Sincerely,