After enduring two decades of an imposed moratorium on its trucking industry’s access to the U.S. market, Mexican teamsters will belatedly be given full admittance to North American highways. Originally, the North American Free Trade Agreement (NAFTA) signed in 1993 provided for a gradual deregulation of truck traffic across the U.S.-Mexico border: Mexican vehicles would initially be limited to the U.S. border states and by 2000 would be allowed to travel freely throughout the country. The overdue retraction of the existing embargo reflects the political stimuli that have long-driven Washington’s NAFTA policy.
The new policy will take effect a number of months after the June 7 U.S. Supreme Court ruling in favor of the Bush administration’s pro-access policy. The Court’s decision needs to be reviewed by the U.S. Department of Transportation and the Federal Motor Carrier Safety Administration (FMCSA) during a minimum 30-day waiting period. Before the Bush administration’s policy can be implemented, the White House must finalize and codify, in co-operation with Mexican officials, how it will conduct mandated safety audits of Mexican trucking companies. Furthermore, hundreds of applications from Mexican trucking firms seeking to operate on U.S. roads must be processed and approved before Mexican carriers will be permitted to travel freely in the U.S. Luis de la Calle, Mexico’s former Under Secretary for International Trade Negotiations, optimistically expects to see some Mexican trucks on U.S. highways before the year’s end, though not, for the most part, beyond the border states; Mexican trucks can carry freight only on destination routes between Mexico and the U.S., not from one point inside the U.S. to another.
Still not reflected in U.S. policy is a clear methodology to prevent an influx of contraband and immigrants across the border, causing considerable apprehension on the part of U.S. border officials. Because excessive inspection by U.S. officials searching for drugs, illegal immigrants and various contraband shipments could be interpreted by a NAFTA or World Trade Organization panel as a constraint of trade, such inspections cannot be counted on as a first line of defense. The Bush administration is understating the huge potential for such illegal shipments, particularly of drugs, as trucks could become the favored conveyance for introducing such illegal cargos to the U.S. Several years ago, when a trial period was introduced allowing Mexican trucks limited access to the U.S., the Drug Enforcement Agency charted a huge surge in drug shipments. More of the same is anticipated once the NAFTA trucking provisions are fully implemented.
A Contentious Past
A prolonged dispute over Washington’s inconsistent implementation of NAFTA provisions has divided the country along party lines and sectoral self-interests. The controversy has further enflamed the international community over the efficacy of such trade agreements. For ten years, the contentious enforcement of the NAFTA accord has prompted a litany of court hearings, international tribunals and dispute panels.
A Case History
In 1982, the U.S. Congress imposed a moratorium on granting authority to Mexican and Canadian motor carriers seeking to operate in the U.S. beyond a distance of 20 miles into U.S. territory. The moratorium was lifted immediately with respect to Canada after a bilateral agreement gave U.S. carriers access to Canadian markets. Under NAFTA’s terms, which went into effect in 1994, the United States was obligated to phase out these restrictions on Mexican trucks by 2000, provided that the vehicles met U.S. safety standards. But under pressure from members of Congress and the Teamsters union – a powerful support base for the Democratic Party – the pro-NAFTA Clinton administration bowed to partisan interests by deciding to maintain existing trade barriers. This system therefore necessitated the development of a costly infrastructure created to support the transfer of goods beyond the 20-mile commercial region, benefiting U.S. carriers at the expense of their Mexican counterparts. Mexico claims that this policy has drained its coffers, costing the government more than $2 billion. Standing to gain much if the U.S.-imposed moratorium was rescinded, the Mexican government filed a legal complaint in 1998 with a NAFTA tribunal. After U.S. policy was successfully challenging through this multinational, free trade body in 2001, the Bush administration responded by attempting to open the border. Under heavy congressional pressure, the President agreed to build a set of safeguards into the policy. The FMCSA was required to analyze safety performance data and create security management programs – including a drug and alcohol testing program, compliance with hours-of-service rules and the evaluation of safety inspection, maintenance and repair facilities. Drivers would be expected to supply proof of insurance with a company licensed in the U.S. and a valid drivers license.
After failing to fully block Bush in Congress, the Teamsters union, which feared losing work to lower-paid Mexican truckers, enlisted the support of environmentalists under the premise that the emissions from an increased number of aging diesel trucks manufactured in Mexico would compound air quality problems. As the policy neared implementation in 2002, lawyers representing a coalition of liberal organizations – including the International Brotherhood of Teamsters, the California Federation of Labor AFL-CIO, the California Trucking Association, the Natural Resources Defense Council and Public Citizen, a nonprofit consumer advocacy organization founded by Ralph Nader – argued that the FMCSA should be required to fully consider the environmental effects of Bush’s proposed course of action on the U.S. border states. Attorney generals from nine states – namely Arizona, California, Illinois, Massachusetts, New Mexico, Oklahoma, Oregon, Washington and Wisconsin – filed briefs in support of the opposition coalition, stating that the Clean Air Act required such air-quality studies. Subsequently, the California-based Ninth Circuit Court of Appeals ruled in January 2003 that an Environmental Assessment (EA) documenting the impact of the proposed action on air quality was required before the administration would be able to lift the two-decade old moratorium.
The Bush administration later appealed the Appellate court’s ruling to the U.S. Supreme Court, which rejected the arguments put forward by the conglomerate of anti-NAFTA activists. Justice Clarence Thomas stated that a court-ordered EA had no purpose when the FMCSA lacks the power to order environmental safeguards. With its limited authority, the safety agency “could not refuse to register Mexican motor carriers simply on the ground that their trucks would pollute excessively.” The Court argued that the President, not the FMCSA, had the power to open the border and, therefore, the agency was under no obligation to continue studying the environmental effects of fully opening the border to Mexican trucks. The EA, which would have been completed by the year’s end, will now be terminated prematurely without public disclosure of its contents.
Bush and his Republican Contingent
The timing of the Supreme Court ruling on Mexican carriers came at an opportune moment for the Bush-Cheney campaign, as does the ruling’s impact on current U.S. trade policy. The Bush White House has maintained Clinton’s precedent of using NAFTA as political leverage to entice the support of strategic interest groups, since labor organizers, environmentalists, farmers and businessmen alike perceive themselves to have a stake in the treaty’s success or failure. While Clinton easily succumbed to the pressures brought on by organized labor and insisted on limiting Mexican trucks to a 20-mile commercial zone, Bush, catering to his own constituency, has reaffirmed his commitment to expanding free trade throughout the hemisphere. Furthermore, Bush is clearly hoping to appeal to the Latino electorate during an election year with his pending Temporary Worker Policy. His campaign hopes that this policy favoring Mexico’s trucking industry will sway Latino organizations to his side come November, as they allied themselves with Fortune 500 corporations and small businesses in support of NAFTA in 1993.
Throughout his presidency, Bush has been straightforward about his commitment to free trade at the expense of organized labor and the environment – two groups in which he has no vested interest. Neither he nor the patently conservative federal judiciary has maintained the pretense that they support any kind of correlation between social concerns and commercial law. Bush has remained faithful to his country’s international commercial agenda, which even negates some of the stronger clauses of the international treaties to which it is party.
NAFTA has provided the incentive for this pro-trade agenda. Gary Hufbauer and Jeffery Schott of the conservative Institute for International Economics claim that the trade pact has benefited the economies of each of the member countries with a stake in its success. Bush predictably seeks to continue this supposed growth trend. Fortune 500 companies, most of which are large donors to the Bush campaign, stand to make tremendous gains from the White House’s cheap-labor foreign policies; the developing world has proven to be a more efficient and profitable locale – in terms of comparative advantage – in which to operate many types of businesses. Lifting the trade embargo will U.S.-owned maquiladoras to significantly reduce their shipping charges from the Mexico-U.S. border, as Mexican truckers will work for less money than their U.S. counterparts.
Kerry: A Viable Alternative?
If John Kerry wins in November, we should expect U.S. trade policy to shift back to Clinton’s rhetorical sympathies for the left, while simultaneously pushing to expand global trade to the pleasure of the Bush constituency. Kerry has pledged to order an immediate 120-day review of all existing trade agreements to “ensure that [the U.S.’] trade partners are living up to their labor and environmental obligations and that trade agreements are enforceable and are balanced for American workers.” The irony in this statement is two-fold: first, Kerry’s primary concern is ostensibly that U.S. trading partners are not living up to their commitments, while, in fact, the U.S. has also flagrantly violated NAFTA provisions concerning Mexican truckers for the past four years. Secondly, Kerry has voted in favor of all free trade agreements put before the Senate, though his campaign rhetoric has become increasingly protectionist in tone.
As past precedents have demonstrated, the 120-day review will probably prove to be more fluff than substance. While campaigning for office, Canadian Prime Minister Jean Chrétien (1993-2003) pledged to renegotiate NAFTA in order to protect Canada’s cultural industries and limit the effects of the treaty’s subsidy provisions. “If we can’t renegotiate, you know we will abrogate.” But despite Chrétien’s pledges, the treaty went into effect in January 1994 without a single alteration from Ottawa. The Prime Minister’s period of soul-searching was devoid of follow-through; U.S. voters would be wise to believe that Kerry’s will be as well.
Kerry’s oft-proclaimed determination to review free trade in the hemisphere could be nothing more than a cynical political stance, rather than a genuine attempt to shed light on the inherent problems of the U.S.’ trade agreements – namely that they lack specific measures to protect the domestic labor force and the environment or to suppress the flow of contraband and immigrants. It remains unclear how Kerry will juggle the interests of labor and the environment – primary bastions of Democratic support – with his apparent commitment to furthering free trade. Clearly, however, like Clinton and Bush before him, Kerry is using NAFTA to bolster his political standing among his supporters. The prosperity of Mexico’s trucking industry and the U.S.’ NAFTA commitments remain little more than an afterthought to party politics.