Senate provision provides hope for resolution of tariffs with Mexico

08/10/2009 08:50:35 AM
Ashley Bentley

There is a glimmer of hope that the Mexican trucking dispute that caused tariffs to be placed on at least seven U.S. fresh produce items could be heading toward a resolution.

The Senate Appropriations Committee changed the language that was passed in the omnibus bill in March, which had eliminated a cross-border trucking pilot program with Mexico, causing the country to retaliate with tariffs on $2.4 billion worth of U.S. products. Citing safety concerns, Congress had added a provision so that such a program could not legally exist.

The new language allows there to be a cross-border trucking program.

“Language has been in several different appropriations bills the last few years that has prohibited establishing a cross-border trucking program, but the Bush administration decided not to establish a program, just to operate one,” said Kam Quarles, vice president of government relations and legislative affairs for United Fresh Produce Association, Washington, D.C.

“In the omnibus bill earlier this year, Congress changed it. Not only can you not establish, but you can’t offer the program, which wiped out the pilot program,” Quarles said.

The provision passed by the Senate Appropriations Committee the last week of July is only a first step, as a bill would ultimately have to be conferenced and passed by both the House and the Senate.

“It’s hope that this is the beginning of the turnaround,” Quarles said.

If this type of language is passed by Congress when it gets to the appropriations bill, which is technically due Oct. 1, it would allow for development of a program — not establish one. It would still be up to the Department of Transportation, the office of U.S. Trade Representative and the State Department, which have been charged by President Obama with creating a new program, to put one in place.

“Since you had an existing pilot program that people were dealing with, it’s not a mystery how to recreate a program,” Quarles said. “Congress was standing in the way with the language in the omnibus.”

Quarles said Congress will not get to the appropriations bill before its recess, as the House is already out, and will likely take it up in September. There won’t be a resolution, at least, until after Oct. 1, the start of a new fiscal year.

“Is this going to be solved this summer?” Quarles said. “No.”

The real question, Quarles said, is what it will take for Mexico to revoke its tar-iffs.

“Will Mexico need to see a plan in place before they take back the tariffs? Or will seeing a plan be initiated be enough?” Quarles said. “This issue is causing a lot of pain due to the tariffs in produce. This is the first obvious sign that Congress is perhaps reconsidering that language that caused this.”

President Obama was pressed on the issue Aug. 10 by Felipe Calderon, president of Mexico, during a high-level summit that also included Canadian Prime Minister Stephen Harper. A U.S. official at the Guadalajara, Mexico, meeting said Calderon expressed concern that the U.S. limits are less about safety and more about protecting the U.S. trucking industry from foreign competition, which is against the U.S.'s NAFTA obligations, according to the Associated Press.



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