Mexican trucking group suing U.S. for $6B

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Mexico’s National Cargo Transportation Association (Canacar) announced Monday, June 1, that it is suing the United States for $6 billion because of its refusal to allow Mexican haulers onto its roads as required under the North American Free Trade Agreement. About 4,500 Mexican trucking companies are involved in the lawsuit, according to Canacar.

The omnibus appropriations bill signed by Obama on March 11 included a ban on funding for the Bush administration’s cross-border program, which began in September 2007 and allowed the U.S. Department of Transportation to select a limited number of Mexican and U.S. fleets to do business beyond the border zone. USDOT battled lawsuits and congressional acts to stop the program, which it said was needed to meet NAFTA commitments.

Mexico, which said the action violated NAFTA, imposed higher tariffs on about 90 U.S. exports, such as fruits and industrial goods, worth an estimated $2.4 billion. Mexico said it would remove the tariffs as soon as the United States drops the trucking ban. Mexico’s government asked Obama to permit all of the country’s tractor-trailers to operate across the border, a Mexican Transportation Department official said. A consortium of 140 U.S. business, food and agricultural groups, including the U.S. Chamber of Commerce, urged Obama to settle the dispute.

After signing the omnibus bill, Obama asked the Office of the U.S. Trade Representative to create a new cross-border program. Debbie Mesloh, a spokeswoman for the U.S. trade office, said Obama told the office to work with Congress, the Transportation and State departments and Mexican officials to come up with legislation to create a program that “will meet the legitimate concerns of Congress and our NAFTA commitments.”

In April, U.S. Transportation Secretary Ray LaHood sent recommendations on resolving the matter to the White House ahead of Obama’s visit to Mexico. Obama said after talks with Mexican President Felipe Calderon that he wanted to repair the trade dispute. “My team is working with President Calderon’s team to resolve this issue, and I’m hopeful that we can resolve it in an effective way,” he said. In late May, LaHood said that work was under way on a new trucking program, which possibly could begin as early as this month.

The Bush administration’s cross-border program had come under fire from various groups, including the Teamsters, citing safety concerns. USDOT’s Office of Inspector General’s final report on the Bush administration’s cross-border program, released Feb. 6, echoed past remarks that it had insufficient participation to provide statistically reliable results to fully evaluate it. USDOT, which received the report in December, mostly concurred with DOT-OIG’s assessments.