The future of the cross-border pilot program for Mexico-based trucking companies is unsure at best, according to a federal audit, and that could be bad news for U.S. produce exporters.
If the program fails, Mexico could reinstitute retaliatory tariffs on U.S. produce.
The 20% tariffs hit everything from potatoes to pears, costing U.S. growers and shippers millions.
Mark Powers, vice president of international trade and transportation for the Northwest Horticultural Council, Yakima, Wash., said U.S. growers want the cross-border program to succeed.
“We also hope if Mexican (trucking) firms show they are not really interested … that their government will take that into consideration when looking at potential tariffs,” Powers said.
The North American Free Trade Act, effective in 1994, requires the U.S. to allow cross-border trucking, but legal challenges by U.S. trucking oranizations kept the Mexican trucks out for more than a decade.
The pilot program gained approval from President Obama and his Mexican counterpart Felipe Calderon in July 2011. The first Mexican truck came into the U.S. in October 2011.
Also in October 2011, the Department of Transportation’s Office of Inspector General began an audit of the program, as required by Congress. The audit period ran through May 2012, but wasn’t published until Aug. 16.
Participation is so low that statistically valid data required by Congress cannot be collected, according to the audit.
For example, the Federal Motor Carrier Safety Administration had estimated that 46 companies would need to participate in the three-year program to reach the target of 4,100 inspections. When auditors checked, four companies were participating with a total of four trucks and five drivers. FMCSA had done 89 inspections.
The audit also found problems with the FMCSA’s pre-assessments, especially in the area of testing drivers for English proficiency, which is required. The auditors observed three tests and in two of them the drivers were allowed to answer in Spanish.
The OIG recommended that drivers be required to answer in English and that FMCSA test them on 22 traffic signs, rather than a random sampling of four. The agency agreed to make those changes.
Other trucking companies have applied to participate in the program and the OIG audit report said if enough gain approval there may be a chance that enough data will be generated to accurately assess the program. The OIG is required to follow up with another audit after the three-year pilot program ends.