(Reuters) –– The Obama administration on Thursday proposed a new inspection and monitoring regime to permit long-haul trucks from Mexico on U.S. highways after years of delays over safety concerns and political wrangling.
The Transportation Department’s compromise plan seeks to revive efforts to fulfill a key provision of the North American Free Trade Agreement (NAFTA), which is highly unpopular with labour but supported by many businesses as a cost advantage.
Mexico has imposed tariffs on U.S. products in response to the delay in permanently moving ahead with the trucking program.
Congress cut off funding for previous cross-border trucking programs. Most of the political opposition came from labour-friendly Democrats who controlled the House of Representatives. Republicans formally assumed the majority of that chamber Wednesday.
Unions, especially the Teamsters-represented drivers, fiercely oppose Mexican trucks on U.S. roads, fearing job losses. Currently, big rigs from Mexico must offload their goods near the border so U.S. trucks can haul them the rest of the way.
Certain industries are watching the political developments closely.
For instance, Mexico is a leading importer of U.S. pork, but currently it has a five per cent duty on that product. It is widely believed the duty was applied in retaliation for prohibiting Mexican trucks.
“The pork industry has been eagerly awaiting this moment, which should further facilitate pork trade to Mexico,” said Rich Nelson, analyst at the agriculture advisory firm Allendale Inc.
The Mexican government said Thursday that the U.S. proposal was a positive first step in resolving the ongoing trade dispute.
Humberto Trevino, Mexico’s deputy transport minister, said the government would review the U.S. proposal and respond with observations by Monday.
Once an agreement is reached, a series of retaliatory tariffs Mexico imposed on U.S goods would be lifted, Trevino told Reuters in an interview.
“It could be within weeks,” he said.
Farmers in Washington state, feeling the effects of Mexican tariffs on agricultural products, are also hopeful for a resolution.
Senator Patty Murray of Washington urged Transportation Secretary Ray LaHood to move quickly on putting the proposal in place.