NEW EVIDENCE SUGGESTS THAT A NAFTA RULING ALLOWING MEXICAN TRUCKS ACCESS TO U.S. WILL EXPOSE THE PUBLIC TO SIGNIFICANT THREATS
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A legal ruling by a North American Free Trade Agreement (NAFTA) tribunal will be released in February 2001. The NAFTA ruling -- requiring the U.S. to permit access to U.S. highways by Mexican trucks -- may not only put American motorists and communities at great risk, but could destroy NAFTA itself. Ironically, this NAFTA ruling -- which could bring NAFTA's threat to public health and safety directly into communities nationwide -- comes as President George W. Bush calls for the expansion of NAFTA. Already his plan for the expansion of NAFTA to all the Americas faces a decidedly negative U.S. public opinion as a result of NAFTA.
The NAFTA dispute America faces about open-border trucking is indicative of the split in the U.S. over corporate managed trade: on one side are corporate pressures to use "trade" deals to further a broad agenda of deregulation regardless of the environmental, health or safety consequences; and on the other, the public pressures to demand that international commercial agreements do not undermine important social and environmental goals.
Imminently in early February, 2001, a final ruling will be issued in a simmering trade dispute between the U.S. and Mexico that pits commercial trucking interests against the public interest of safe highways. A preliminary ruling in the case rejected U.S. arguments regarding the lack of safety of Mexican trucks and ordered the U.S. to permit access by Mexican trucks to U.S. highways.
The North American Free Trade Agreement went into effect in 1994 with provisions allowing Mexican trucks increasing access to U.S. highways. These NAFTA provisions required the U.S. to open access to all U.S.-Mexico border states in 1995 and to permit Mexican trucks to travel throughout the entire U.S. as of January 1, 2000. Until these provisions are implemented, because of a pre-existing U.S.-Mexico agreement, Mexican trucks may operate in a border commercial zone ranging from 3 to 20 miles into the U.S. to drop off loads destined for U.S. interior states. There are no interior checkpoints to enforce the border zone, however, and Mexican trucks have been pulled over many times in the border states and beyond.
Other provisions of NAFTA require the U.S., Mexico and Canada to negotiate unified standards for truck safety and commercial driver licensing. Proponents of open border trucking argued that this would allow Mexico to develop domestic standards at least as protective as those in the U.S. Yet the standardization process was not linked in NAFTA to the opening of the border and has not thus far led to the establishment of cross-border, uniform safety standards. In defending the administration's decision to keep the border closed, the U.S. Department of Transportation (DOT) has repeatedly documented the significant safety risks Mexican trucks would pose to U.S. highways.
Moreover, the standards that do exist for commercial trucks in the U.S. are hardly a model for safety. Some critical standards, such as restrictions on the number of hours that truckers may drive, date from the 1930s. A consensus has been growing on Capitol Hill that this and other safety measures need to be updated soon in order to protect the public highway. If U.S. standards are upgraded the U.S. and Mexico would have to go back to the drawing table on many issues, so that Mexican trucks and driving rules would not lag behind the new U.S. standards.
Because of all these concerns, while in office President Clinton maintained the limited access to the border commercial zones and did not allow any greater access to the four U.S. states bordering Mexico or the rest of the U.S.
In 1998, Mexico challenged Clinton's refusal to open the border before a NAFTA enforcement tribunal,
demanding that the U.S. abide by its NAFTA commitments and open its highways. On November 29, 2000, the NAFTA tribunal released its preliminary ruling on the case supporting Mexico's claim: the U.S. must open its highways to Mexican trucks or pay an as-yet-unnamed penalty to Mexico for refusing to comply with the NAFTA ruling. A final ruling is due to be made by February 5, 2001 and must be released to the public 15 days later.
The preliminary ruling in the NAFTA truck case contained the legal sophistry which is becoming increasingly common in trade tribunal rulings as public oversight of this realm has increased. The panel ultimately ordered the U.S. to open its border, but did so using crafty language: the panel ruled that the U.S. can maintain its own truck safety standards as long as it also complies with NAFTA's provisions.
In fact, there was never any question whether the U.S. could keep its domestic truck safety rules on the books. The issue was whether those safety standards could be enforced in the context of Mexican trucks.
Owners of commercial fleets who wish to operate in the U.S. must apply for operating permits from the U.S. Department of Transportation. According to the NAFTA panel, the U.S. may require that Mexican trucking companies which apply to be able to cross the border will meet all U.S. safety and labor standards. While this sounds good in theory, in practice given the state of Mexican inspection and enforcement, the only way to monitor whether a company is upholding its obligations is to check every truck which crosses the border and maintain good records on the companies and trucks that fail inspection there or elsewhere in the U.S. Although our government has been working with Mexico to develop a common database to do just that since NAFTA was implemented, no system is currently in place, and we are years away from a workable monitoring process.
Additionally, although the imminent NAFTA border opening deadline creates pressure on Mexico to develop a meaningful motor vehicle safety standard and oversight system little progress has occurred. Although some new Mexican laws are on the books, compliance is voluntary for the first year, and there is little evidence on the level of the Mexican government's commitment to enforce the new rules.
What the preliminary panel ruling actually required was that the U.S. must comply with NAFTA and open its borders-- regardless of our state of readiness to enforce critical American health and safety standards. If the U.S. also seeks to try to enforce U.S. safety requirements, it must do so on a truck-by-truck basis. The U.S. inspects approximately 40 percent of domestic trucks with inspections being merely one element of its multifaceted truck safety regulatory system. And the safety standards in Mexico will not do much to assure American safety once the trucks cross the border. As described in this report, Mexico has only a fledgling truck safety system. Our experience thus far has demonstrated the risks. While fewer than 1 percent of Mexican trucks now entering the U.S. are inspected, fully 35 percent of those trucks are forced out of service due to serious safety failures.
To attempt to fully enforce U.S. truck safety standards in the context of Mexican trucks would require that every single Mexican truck be inspected on the border. When President Bush was governor of Texas, he signed a letter to the Clinton Administration criticizing the refusal to open the border. The new administration may argue that the U.S. can ensure safety by inspecting each Mexican truck. But the government and the U.S. trucking industry (which seeks to hire cheap Mexican drivers) know this is impossible.
Currently, 2 million trucks are inspected in the U.S. annually. This includes the 1 percent of 4 million (or approximately 35,000) Mexican trucks now crossing that are checked. DOT estimates that an additional 3 million Mexican trucks would cross yearly if the border were open. Thus, to inspect all entering Mexican trucks, U.S. inspections per year must rise from 2 million to 9 million trucks. Currently, there are about 101 state commercial truck inspectors and 60 federal inspectors at the border who are able to cover 1 percent of the current 4 million Mexican trucks. Thus, to cover every Mexican truck if the border were opened with even a cursory inspection would require 32,000 inspectors. It is unlikely that the administration will guarantee this enormous resource allocation or the necessary funding for the construction of the huge new inspection facilities that would be needed to avoid week-long border backups.
Yet, even if the U.S. had the additional resources to try to enforce U.S. safety standards on a truck-by-truck basis, the preliminary NAFTA truck ruling also included a cryptic reference to a NAFTA provision that could require the U.S. to treat U.S. and Mexican trucks identically for inspection purposes. In typical trade doublespeak, the preliminary ruling contains language suggesting that the U.S. could treat Mexican trucks differently for inspection purposes. However, at the same time, the ruling requires that the U.S. comply with NAFTA's Technical Barriers to Trade Chapter, which explicitly forbids domestic and foreign players from being treated differently.
Amid the presidential election chaos, the crucial story of the NAFTA truck ruling received little media coverage outside the "trade press." Yet, the upcoming decision has enormous policy and political implications. President Bush has two basic options:
- to reject the NAFTA tribunal's orders to open the border and compensate Mexico for keeping the border closed until Mexican trucks can meet U.S. safety requirements; or
- to allow Mexican trucks to enter the U.S. and risk that inevitable future crashes will lead to additional loss of life and to a massive public backlash against NAFTA.
The high price to be paid under either response scenario -- either financially, to maintain safety, or personally and politically, with increasing fatalities and injuries if the border is opened to unsafe trucks -- demonstrates that NAFTA is a severely flawed agreement.
President Clinton noted three major problems that were unsolved when he kept the border closed in 1995: major differences between U.S. and Mexican safety regulations;
- major differences in the application and enforcement of the safeguards; and
- the inability of states and federal regulators to effectively enforce U.S. standards on Mexican trucks.
Those concerns are still valid-- permitting greater access for Mexican trucks will endanger U.S. motorists, which is why U.S. consumer and highway safety groups urge President Bush to keep the border closed until the safety issues are addressed and to compensate Mexico as NAFTA's rules require.
President Bush's response to this crisis will significantly impact American public opinion regarding trade and President Bush's public image. Many people in the corporate business lobby that financed Bush's campaign and inauguration are eager for him to open the border and allow underpaid Mexican drivers to transport the corporations' cheap-labor Mexican-made goods to the U.S. for sale (long haul drivers in Mexico earn about 6¢ a mile compared to about 28¢ a mile for U.S. drivers). Most other Americans -- especially in the border states of Texas, California, Arizona and New Mexico -- are legitimately concerned that a flood of unsafe, basically unregulated freight trucks from Mexico would pose a significant threat to the quality of life and to highway safety. The safety threat is so significant that a California trucking industry association opposes opening the border, foreseeing a backlash against all trucking when the inevitable accident occurs.
The current NAFTA truck crisis is one of the most dramatic examples of how "trade agreements" such as NAFTA reach far beyond appropriate commercial issues and can threaten vital domestic health and safety standards, even when these standards are applied equally to domestic and foreign commerce. If U.S. federal highway safety officials conclude that Mexican trucks do not meet U.S. safety standards, why should that well-substantiated safety policy be challengeable before a NAFTA dispute resolution tribunal as a trade barrier?
Indeed, raising Mexican truck safety standards would have an enormous benefit for the safety of Mexican motorists and communities. Currently, Mexico has a highway fatality rate more than three times that of the U.S. or Canada. With the opening of the border according to an arbitrary timeline that is set and enforced under the NAFTA agreement without any connection to compelling safety considerations, safety advances in Mexico and the U.S. will lose critical leverage for improving standards.
In short, the panel's decision will force the opening of the border to occur far too soon. The border should remain closed until there is a consensus that meaningful safety standards and oversight are in place.
The continuing trend is that "trade" agreements will undermine safety, health and other domestic social policies. This ongoing diminishment of our hard-won health and safety safeguards fuels the backlash against NAFTA and the World Trade Organization (WTO).