Opponents of President Obama's proposed plan to re-open U.S. borders to Mexican trucks got fuel for their fight on Friday when the Department of Transportation reported stunning gains in truck-based trade with Mexico.
Transportation officials announced on Thursday that surface-transportation trade between the United States and Mexico grew 27.6 percent last year to a total of $320.3 billion. Overall, NAFTA trade grew by more than 24 percent, the biggest year-over-year jump since the agreement went into effect in 1994.
Though the gains were startling, they could also complicate the Obama administration’s argument about the need to open the borders to Mexican trucks as a way to increase cross-border trade.
President Obama’s proposed deal, reached last month with Mexican President Felipe Calderon, would resolve a decade-long conflict over access for Mexican trucks to the United States and is intended to encourage more trade. The NAFTA agreement is supposed to allow that access for Mexican trucks, but the United States blocked them because of safety and environmental concerns. In response, Mexico imposed tariffs on imports of U.S. produce.
But the explosive jump in trade with Mexico last year could undermine supporters of lifting the truck ban, since the jump occurred while the ban was still in place.
President Bush eased the ban in 2007 with a pilot program that allowed a small number of carefully inspected Mexican trucks to cross the border. But Congress cut funding for the program in 2009, and Obama halted Mexican domiciled trucks from access to the United States.
Supporters of opening the borders note that truck-based trade with Mexico plummeted by more than $27 billion the year that the full ban was re-imposed in 2009. That sharp dip, coupled with billions of dollars in tariffs imposed by Mexico, drove overall NAFTA revenues down. Lifting the ban, they contend, would remove a major barrier and put an end to Mexico's ongoing punitive tariffs against the United States.
“With unemployment nearly 10 percent, America needs to increase U.S. exports and create jobs, not create new barriers that make American exports less competitive,” House Ways and Means Committee Chairman Dave Camp, R-Mich., said earlier this month. “If we continue to disregard our obligations and compel this retaliation, we are punishing our farmers, businesses, and workers.”
The surge in trade last year, when the ban was still in place, complicates that argument.
Nearly 90 percent of all NAFTA trade in the last year occurred over land, and trucks carried more than 81 percent of that trade with Mexico. The overall land-trade deficit with Mexico also remained about the same as it was in 2008.
Some members of Congress have come out in strong opposition of Obama's plan.
On Thursday, Sen. Mark Pryor, D-Ark., sent a letter to Transportation Secretary Ray LaHood arguing against lifting the ban.
Pryor argued that the agreement, which calls for Mexican trucks to carry electronic monitoring devices, would require U.S taxpayers to foot the bill for them.
“Electronic, on-board recorders keep our highways safe by enforcing hours-of-service laws and keeping fatigued drivers off the road,” Pryor said. “While I support these measures, it is unfair to ask taxpayers to pay for these devices in Mexican carriers, particularly in light of our current economic climate.”
And Pryor is not alone. Last week, Rep. Peter DeFazio, D-Ore., and a group of 78 House members sent a letter to LaHood asking to reconsider the deal with Mexico.
DeFazio argued that allowing Mexican trucks free access to American roads would have “significant impacts on the safety of our roads and on American jobs."
The letter also pointed out that President Obama allocated $4.3 million of the Federal Motor Carrier Safety Administration's 2012 budget to implement the plan. Lawmakers opposed using tax dollars to ensure Mexican trucks adhere to American regulations.
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