Mexico to Cut 50% of Tariffs on U.S. Goods as Truck Border Dispute Ends

Mexico will cut tariffs on $2.4 billion worth of U.S. products after the United States agreed to end a ban on Mexican trucks crossing the border, Economy Minister Bruno Ferrari said.

The countries will likely sign a formal trucking agreement in June and some tariffs will immediately fall, Ferrari and Dionisio Perez-Jacome, the minister of communications and transportation, said yesterday at a news conference in Mexico City.

“We’ll lower 50 percent of tariffs to all the products once the agreement is signed,” Ferrari said. “The 50 percent remaining will be lifted once the U.S. grants the first authorization for a Mexican truck to operate” across the border, he said.

Mexican President Felipe Calderon and U.S. President Barack Obama announced an end to the truck ban after a meeting in Washington last week. The dispute between the nations, which have a $393 billion trading relationship annually, dates to the North American Free Trade Agreement in 1995. U.S. officials have promised on multiple occasions to resolve the standoff. The nation never allowed Mexican trucks full access to the U.S.

Mexico responded to the 2009 cancellation of a pilot program that allowed some Mexican trucks into the U.S. by imposing tariffs of 10 percent to 45 percent on U.S. goods including vegetables, wine, juices, sunglasses and toothpaste.

Photographer: Sandy Huffaker/Bloomberg

As part of the new trucking agreement, Mexico and the U.S. will initiate an 18-month program to allow trucks to bring goods across the border. Close

As part of the new trucking agreement, Mexico and the U.S. will initiate an 18-month... Read More

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Photographer: Sandy Huffaker/Bloomberg

As part of the new trucking agreement, Mexico and the U.S. will initiate an 18-month program to allow trucks to bring goods across the border.

Tariffs

In August, Mexico applied a second round of tariffs of 5 percent on some cuts of pork and as much as 25 percent on fresh white cheese, according to a statement in the nation’s official gazette. Onions, apples, pears, oranges, cherries, soy sauce and mineral water are also on the list.

As part of the new trucking agreement, Mexico and the U.S. will initiate an 18-month program to allow trucks to bring goods across the border, Perez-Jacome said.

During that period, truck owners will receive a provisional permit to cross the border. Owners must register vehicles with the U.S. and agree to inspections each time a vehicle crosses during the first three months of the program.

Companies will then receive an “irrevocable” permit for U.S. access that can only be canceled if a truck fails to meet transportation regulations, according to Perez-Jacome. The new program will not limit the number of Mexican companies that can apply for authorization to cross the border, he said.

Mexico and the U.S. will create a monitoring group to ensure the agreement’s goals are met, Ferrari said.

Resolving Dispute

“We finally have found a clear path to resolve the dispute over trucking between our two countries,” Obama said March 3 at a White House news conference with Calderon.

Independent truckers said that allowing Mexican haulers into the U.S. may drive small trucking companies out of business.

“For all the president’s talk of helping small businesses survive, his administration is sure doing their best to destroy small trucking companies and the drivers they employ,” Todd Spencer, executive vice president of Owner-Operator Independent Drivers Association, said in a statement.

The American Trucking Association said it welcomed the agreement.

“We hope this agreement will be a first step to increasing trade between our two countries, more than 70 percent of which crosses the border by truck,” Bill Graves, the Arlington, Virginia-based trade group’s president, said in a statement. Government rules should “ensure that carriers from both countries are treated equitably.”

To contact the reporter on this story: Jose Enrique Arrioja in Mexico City at jarrioja@bloomberg.net

To contact the editors responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net; Sylvia Wier at swier@bloomberg.net.

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