US said to seek NAFTA restrictions on long-haul Mexican trucking in the country

THE US has proposed another difficult change to the North American Free Trade Agreement that could eventually restrict long-haul Mexican truckers from operating in the country, according to people familiar with the discussions.

American negotiators asked to remove Mexico’s long-haul industry from a NAFTA chapter on cross-border services, according to an industry official familiar with the proposal who isn’t authorised to speak publicly.

That could open the door to restrictions on truckers, as losing NAFTA trade protections and advantages would make it harder for Mexico to challenge any future US requirements on trucks such as new safety checks.

One government official familiar with the text said the US proposal would allow restrictions and limitations on Mexican trucking if certain conditions were reached, while another official described it as a broad industry exclusion that came during the last round of talks in October. Neither was authorised to speak publicly.

The US Trade Representative’s office declined to comment, and hasn’t made its proposals public. Reuters also reported last month that the US was seeking fresh restrictions on long-haul trucks from Mexico, citing a person familiar with discussions.

The US for years after NAFTA came into effect resisted giving Mexican truckers the right to operate throughout the country. They were limited to bringing loads a short distance into the US, where they would be transferred to American outfits for final delivery.

A dispute resolution panel backed Mexico on the matter in 2001, though the US didn’t comply for years. Mexico at one point imposed tariffs in retaliation. It wasn’t until 2015 that the US gave licensed Mexican truckers the right to haul cargo throughout the nation.

The US proposal on Mexican trucking adds to a list of contentious demands that President Donald Trump’s team has signaled must be met to keep the 1994 pact alive. The US has also asked to scrap a dispute mechanism that is essential to Canada, the third party to Nafta, and to tighten local content rules for cars.

Negotiators have already said they will extend talks through March 2018, which is longer than originally anticipated and could bring the issue into Mexico’s presidential campaign season and US congressional elections. The next round of discussions is in Mexico City this month.

Mexico’s government opposes the new proposal on trucking, seeing it as a rollback of the rights won in the previous cross-border trucking dispute settlement, according to a person familiar with the position. Mexican Economy Minister Ildefonso Guajardo has said the government opposes anything that would weaken current market access under Nafta.

The US has a US$ 53.1 billion ( RM228 billion) merchandise trade deficit with Mexico through September of this year, and a shortfall of US$ 12.4 billion with Canada.

“It’s not surprising that this is being discussed, especially in view of the history of Washington’s policy approach toward Mexican trucks crossing the border,” said Stephen Laskowski, president of the Canadian Trucking Alliance, or CTA. Laskowski said he hasn’t seen a specific proposal on the matter, and the trucking industries in all three nations are working together to see Nafta improved.

The American Trucking Associations, in a joint statement last month with the CTA and Mexico’s main trucking lobby group, said Nafta benefits the three countries.

On the other side of the debate, the International Brotherhood of Teamsters, a labor union, argues cross-border trucking takes away American jobs and creates safety risks.

Teamsters President Jim Hoffa suggested the US was backing his view during the last round of talks. “The Teamsters and our allies among independent truckers and highway safety advocates will be pleased with the US position on cross-border services,” he said in a statement in mid- October. — WPBloomberg