Background on NAFTA Cross-border Trucking Case
The NAFTA trucks case highlights the threat posed to public safety by the North American Free Trade Agreement (NAFTA).
NAFTA’s service sector chapter included a requirement that all three countries’ highways be fully accessible to vehicles of trucking companies based in any NAFTA nation by 2000, an item pushed by large U.S. trucking firms seeking deregulation and lower wages. NAFTA also recommended, but did not require, that Mexican and U.S. truck safety, emissions and driver standards be harmonized. (i.e. made uniform). That provision had no deadline, nor did it require that Mexican standards be brought up rather than U.S. standards brought down. Post-NAFTA negotiations on the standards issues went nowhere.
The U.S. Department of Transportation’s Inspector General (IG) conducted studies that repeatedly revealed severe safety and environmental problems with Mexico’s truck fleet and drivers’ licensing. For instance, Mexico’s commercial driver’s licenses permitted 18-year-old drivers, required no medical exam or drug testing nor did the government have a system for tracking driver violations, insurance or hours of service.
For NAFTA’s first seven years, the Clinton administration relied on the IG reports and did not implement the NAFTA trucking rules. Mexico used NAFTA’s enforcement system, which allows one NAFTA country to challenge another’s domestic laws before international tribunals, to force compliance. In 2001, a NAFTA tribunal ruled for Mexico, ordering the United States to allow access for Mexico-domiciled trucks or face permanent trade sanctions.
One of newly-elected President George W. Bush’s first actions in office was to try to implement the NAFTA tribunal’s order. But Public Citizen and a coalition of consumer, labor and environmental groups successfully sued in U.S. federal court to block the order based on the administration’s failure to conduct an environmental impact assessment as required by the National Environmental Policy Act. At issue was the prospect that Mexico-domiciled trucks driving throughout the U.S. would exacerbate air pollution, since the Mexican truck fleet is older and emits greater quantities of pollutants, including nitrogen oxide and particulate matter. Some U.S. border states supported the suit, as the influx of these trucks was projected to put them out of compliance with the Clean Air Act.
This victory for safety and the environment was later overturned by a 2004 Supreme Court ruling. (Department of Transportation v. Public Citizen, 541 U.S. 752 (2004) In a chilling ruling with implications for wide array of domestic policies implicated by NAFTA and other trade pacts, the Supreme Court concluded that the executive branch had significant discretion on this domestic highway safety policy because it implicated the president’s foreign affairs authority relating to enforcement of an international agreement.
During Bush’s second term, his administration worked with the Mexican government to finalize what it called a “pilot program” for Mexico-domiciled trucks to be allowed access – despite ongoing safety concerns. A bipartisan coalition in Congress intervened, setting specific safety and environmental conditions that had to be met before the program could go into effect. Another lawsuit was filed by Public Citizen and other organizations. This lawsuit focused on the so-called pilot program’s failure to meet basic statutory requirements for a pilot program, such as providing safety data to determine if congressional requirements were met to transition the test period into a permanent policy. The Bush administration implemented its “pilot program” anyway, claiming Congress’ dictates only applied to a final open border policy, not a test program.
In March 2009, after years of congressional pressure, President Obama signed into law a bill that ended Bush’s 18-month NAFTA truck program. A few days later, Mexico announced that it would impose sanctions against the United States – tariffs on $2.4 billion in U.S. trade – as retaliation. The sanctions targeted exports from the states of House and Senate members that had voted in favor of the measure to forbid access until safety and environmental improvements were made, including oranges, grapefruits, pork, cheeses, and heavy machinery. In August 2010, Mexico announced that it would “rotate” its retaliatory tariff list to hit new, additional U.S. products.
In April 2010, 78 members of Congress, including Rep. Peter DeFazio (D-Ore.), then-Chairman of the Highways and Transit Subcommittee of the House Transportation and Infrastructure Committee, sent a letter to Department of Transportation Secretary Ray LaHood and U.S. Trade Representative Ron Kirk urging them to negotiate with Mexico to remove the cross-border trucking provisions from NAFTA. They asked the administration to swap improved access in another sector to “buy back” the policy space to maintain U.S. highway safety. Such negotiated compensation is allowed under NAFTA.
The Obama administration refused, instead allowing the sanctions to remain in place while it worked on complying with NAFTA rather than fixing the unreasonable NAFTA rules. Even as safety and environmental issues continue, in October 2011 the Obama administration began a program to allow access to all U.S. roads for Mexico-domiciled trucks. Under this program, American taxpayers will purchase electronic monitoring systems for Mexican-domiciled trucks so drivers’ hours of service can be monitored. A private Mexican association of truck drivers also has filed a case demanding $6 billion in compensation from U.S. taxpayers under the investor rights provisions of NAFTA for losses caused by failure to implement the NAFTA “open-border” trucking policy.
Public Citizen, the International Brotherhood of Teamsters, and the Sierra Club have filed a lawsuit to block this dangerous program. The program violates numerous laws, including a 2007 law in which Congress specified the requirements for any such pilot program. Every U.S. freight truck needs a label that it is in compliance with federal safety standards, but the Department of Transportation is waiving this requirement for Mexico-domiciled trucks, and in its place will accept freight companies have showing that trucks were manufactured in 1996 or later. Furthermore, drivers of Mexico-domiciled trucks will only be required to perceive the color red, whereas U.S. law requires drivers to see red, green, and amber.
The Department of Transportation also conducted its environmental impact assessment of the pilot program after the program was designed, but the law requires that it should have been conducted earlier in the process so that the program could be changed if necessary in response to the findings. Moreover, the environmental impact assessment only examined the environmental impact of the inspections, rather than the impact of the potential increased truck flows themselves. Since Mexico-domiciled trucks need to comply with lower emission and fuel efficiency standards than U.S. trucks, the program would likely boost pollution in the border states and throughout the United States.
Due to the limited availability of certain fuels, the program does not guarantee reciprocal access to Mexico for U.S. trucks, which was a condition stipulated by Congress for any pilot program. The program does not even serve its stated purpose of evaluating the ability of Mexico-domiciled trucks to operate safely in the United States since there is no plan to collect a statistically valid sample of program participants.
The safety risks from the surge in truck traffic that will result from what the Obama administration calls a new pilot program are even more daunting when you consider that even when cross-border traffic was as low as 4.1 million in 1999, border inspectors were able to inspect fewer than 1 percent of all trucks coming from Mexico, according to the Department of Transportation’s Inspector General. DOT officials have estimated that as many 7 million trucks could cross the U.S. border each year if borders are fully opened. Without increasing the number of U.S. border inspectors, the capacity to inspect NAFTA trucks would drop far below 1 percent of all truck traffic.
The Obama administration’s new NAFTA trucks program also threatens the quality of life for the growing communities living near truck border crossings on both sides of the border. Even since 1995 when NAFTA trucks were restricted to a 20-mile zone at the border borders, there has been a surge in crime, drug trafficking and air pollution from lines of trucks that can run several miles long during peak periods as trucks wait to enter the United States. Increased truck traffic has been the leading cause of deteriorating air quality at 13 border cities and has been linked to high levels of respiratory disease and lead in children in border communities, according to the GAO, a government oversight agency.
The Obama administration’s October 2011 NAFTA trucks program threatens the public safety for U.S. motorists and the environment on both sides of the border. Large trucking firms in both countries are happy – Mexican drivers are paid much less than U.S. drivers, and under the program, a low-wage Mexican driver can now haul a load for anywhere in Mexico and anywhere in the United States.
The Obama administration should have renegotiated the NAFTA provisions rather than implementing outrageous requirements that put our safety and the environment at risk.