One of the provisions of the North American Free Trade Agreement (NAFTA) is that the United States is supposed to allow Mexican truck drivers the ability to transport freight in the U.S. as long as the trucks meet certain safety standards. The U.S. has yet to abide by the terms of this provision and in March of 2009 President Obama cancelled a small pilot program that allowed some Mexican truckers to transport goods in the U.S. The Mexican government retaliated against the trucking ban by imposing $2.4 billion in tariffs on U.S. paper, produce and other goods. The U.S. trucking industry and unions such as the Teamsters union are strenuously opposed to the provision that they contend would cost American jobs and result in more dangerous roads since Mexican trucks may not meet as stringent safety standards as their U.S. counterparts.

The Obama administration recently circulated in Congress a proposal which would open the U.S. trucking sector to Mexican trucking companies. The proposal indentifies conditions that Mexican long-haul truck carriers would have to meet, including safety audits, emissions standards and driver background checks. Mexican officials welcomed the proposal, which was viewed as a first step for attempting to resolve the longstanding trade dispute. President Obama is looking to get key Democrats and others on board before ending the trucking ban, but the White House faces increasing political and economic pressure to end the trade dispute. Many U.S. jobs have been lost and more are in jeopardy in the industries hurt by Mexico’s retaliatory tariffs.

QUESTIONS FOR DISCUSSION:

1. What are the advantages and disadvantages of President Obama lifting the ban on Mexican trucks operating in the United States? Analyze the issue from the perspective of consumers, from employees and from the government.
2. International Brotherhood of Teamsters President Jim Hoffa said in response to the proposal: “Why would the DOT [Transportation Department] propose to threaten U.S. truck drivers’ and warehouse workers’ jobs when unemployment is so high?” Evaluate the merits of his comments.
3. President Barack Obama has called for doubling U.S. exports within five years. At the same time, he has moved to curb trade in certain areas under pressure from Congress and unions. The retaliatory tariffs imposed by Mexico may threaten thousands of U.S. jobs if the trade dispute is not resolved, but U.S. trucking jobs may in jeopardy in the trucking ban is lifted. How can President Obama protect one group of American workers without hurting another?

SOURCE: Mitchell, J. (2011, January 7). U.S. jump-starts bid to end truck dispute with Mexico. Wall Street Journal, p. A7. (Retrievable online at: http://online.wsj.com/article/SB10001424052748704415104576065924125822128.html)