Tariffs on some U.S. produce going to Mexico are expected to disappear soon, ending a trade dispute that hinged on a cross-border trucking program.
One Mexican carrier — Transportes Olympics — was issued long-haul operating authority in the U.S. on Oct. 14, according to a notice in the Federal Register. That step should mean Mexico will soon lift 10% retaliatory tariffs in place against U.S. apples, cherries, grapes, oranges, onions and other commodities.
John Keeling, president of the Washington, D.C.-based National Potato Council, said Oct. 13 he was told Mexican trucks could start operating in the U.S. within days.
“As soon as the trucks begin to roll they will announce the final elimination of the tariffs,” he said.
Mexico put the tariffs in place in 2009, shortly after the U.S. ended a pilot program that had allowed Mexican truck drivers to operate in the U.S. The dispute dates back to the 1994 North American Free Trade Agreement, which promised cross-border access when the deal was approved. Delays tied to environmental concerns and union opposition eventually led Mexico to seek retaliatory tariffs on U.S. goods and was authorized to do so by a NAFTA dispute settlement panel.
In 2008, California exported $61 million in grapes, dropping to $16 million in 2009, with grapes facing a 45% tariff, the highest of any item on the tariff list. Volumes dropped from 5.8 million 19-pound boxes in 2008, compared to 1.7 million in 2009, according to a news release from the California Table Grape Commission.
“Mexico has been a vital market for California’s fresh grape industry and it was important to get this issue resolved so steps could be taken to rebuild the market,” said Kathleen Nave, president of the commission, in a news release.
Of the 11 comments received by the Department of Transportation’s Federal Motor Carrier Safety Administration, seven supported the proposal’s Pre-Authorization Safety Audits, including comments from the National Potato Council, the California Table Grape Commission, California Grape and Tree Fruit League and the Northwest Horticultural Council.
Joe Rajkovacz, director of regulatory affairs at the Grain Valley, Mo.-based Owner-Operator Independent Drivers Association, said the group has filed a petition in Washington, D.C. circuit federal court to stop the pilot program and the approval of Transportes Olympics for cross-border access.
“This isn’t game, set and match by a long shot,” he said. “We look at a lot of what happened here between those two motor carriers as one of the reasons this whole process is fraught with pratfalls.”
He said the Department of Transportation is ignoring a memorandum of understanding between the two countries stipulating that all participating vehicles would have to comply with 1998 U.S. Environmental Protection emission standards.
The Department of Transportation notice is available at the Office of the Federal Register website.
In the notice, the agency said it needed to do more work on Mexican carrier Grupo Behr’s request.
“Based on the information provided by advocates, the Owner-Operator Independent Drivers Association, and Teamsters, the agency is conducting additional reviews of Grupo Behr’s inspections and vehicles,” according to the Federal Register. “As a result, the agency will not issue long-haul operating authority to Grupo Behr until such time as this review is complete and the above noted comments are fully addressed in a subsequent Federal Register notice.”
The Department of Transportation’s Federal Motor Carrier Safety Administration said it will provide information on the pilot project on its website.