FMCSA’s Mexican Pilot Program Failing

The controversial Mexican Pilot Program mandate from NAFTA continues to suffer from low participation rates on both sides of the border. Despite the FMCSA’s promotion campaign, truck drivers on both sides fail to see any benefit to the program. What happened?

The Mexican Pilot Program was created to end a 17-year trade dispute between the U.S. and Mexico regarding durable goods, and was designed to reduce consumer costs on the items. But unless more Mexican big rigs start crossing the border under a U.S. Transportation Department pilot program, it may be neutralized in less than 2 years.

U.S. and Mexican leaders will try to avoid a repeat of the trade war that has erupted before over trucking, said Ed Gerwin, a trade analyst at Third Way, a Washington-based research group. Industries that have nothing to do with trucking would bear the brunt should the border remain closed, he said.

If Mexican trucks effectively can’t get into the United States, I’m sure the Mexicans would be tempted to go back to the same retaliation they had under the Nafta rules, Gerwin said.

The initiative grew from negotiations between U.S. President Barack Obama and President Felipe Calderon of Mexico that ended with an agreement signed last July. The two countries have discussed opening the border to truck traffic for more than 17 years under the North American Free Trade Agreement.

Read more about this developing story at Bloomberg Businessweek.