November 18, 2010
Teamsters Union Block NAFTA Implementation
Mexico is the largest U.S. trading partner, with trade flow of nearly $1 billion daily between the two countries. Yet 15 years after Mexican truckers were to be given free access to the U.S. for purposes of transporting international cargo under NAFTA,
they are still limited to a 25-mile commercial zone of the U.S.-Mexico border. Mexico is now retaliating for our foot dragging by imposing tariffs
on selected agricultural and manufactured products shipped from U.S. companies.
[Place cursor over chart to enlarge]
Numerous rationales have been offered for keeping Mexican truckers off U.S. highways. First, there was the safety argument...the drivers and rigs aren't safe. But that myth was shattered by the results of a pilot project which allowed a limited number of Mexican trucks on U.S. roads. Their vehicle and driver out-of-service rates were lower than U.S. trucks.
[Place cursor over chart to enlarge]

Next, there was the fear of smuggling, both drugs and human cargo. Again, the pilot study disproved this assertion.

Then there were complaints Mexican truckers, who earn significantly less than their U.S. counterparts, would take driver jobs away from Americans. But the NAFTA agreement limits Mexican truckers to hauling international goods, and prohibits them from domestic routes in the U.S.

So why the delay in living up to the terms of the agreement? We suspect political influence and campaign contributions from the Teamsters union are to blame. The union spent over $2 million in the 2010 election cycle, 98% of it to support Democrats. The Teamsters also endorsed Obama when he was running for president in 2008, when the union's campaign spending topped $2.5 million, 97% of which went to Democrats. The organization's protectionist agenda has prevailed thus far.
Mexican tariffs now cost U.S. businesses more than $2.4 billion. If the Mexican government ratchets up the campaign on behalf of its truckers and imposes tariffs on major U.S. exports such as rice, corn and beans, the economic cost in tariff payments and lost jobs could be significantly higher. It seems clear the current administration and Congress would rather pay the financial cost of the trucking ban than the political cost of alienating the Teamsters.