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US and Mexico agree on cross border trucking

Mexico City , Mexico: The governments of Mexico and the United States have reached agreement in principle to implement a permanent solution to the decades old cross-border trucking dispute. Although details of the agreement have not yet been released, some of the terms and conditions have become public says Kenneth E Siegel at Strasburger and Price LLP.

In a report on the agreement he says that there will be no limit on the number of carriers that will be permitted to participate in the program or the number of trucks the participating carriers will be permitted to use.

The grant of operating authority to a Mexican carrier will be done in three phases, but unlike the prior program, the final authority once granted will be permanent.

The first phase of the application process, which will result in a provisional operating license to enter the US, will involve the inspection of the Mexican carrier’s equipment and the accreditation of its operators. The second phase involves a three-month period of inspections of the Mexican carrier’s vehicles as they cross the border. The third phase will result in permanent authorization after the Mexican applicant has concluded 18 months of safe operations.

Under the agreement:
• The carrier’s authorization can be revoked as a result of any safety violation.
• US DOT will recognize the experience and safety record of Mexican carriers that participated in the previous demonstration program.
• All participating Mexican vehicles will be required to be equipped with electronic on-board recorders.
• US DOT will purchase the EOBRs for each participating Mexican commercial motor vehicle.
• US DOT will have access to and control over all recorded data.

This last factor has already become a matter of some controversy as FMCSA has recently proposed a new rule which would require all commercial motor vehicles operating in the US to be equipped with EOBRs at their owner’s expense says Siegel.

“Mexico will adopt reciprocal rules permitting US carriers to operate into Mexico. In order to try and avoid Congressional opposition to the new demonstration program, President Obama has included a consultation period with Congress as part of the new Agreement. The US Congress in 2009 directed U.S.DOT to terminate the 2007 cross-border program. As a result, Mexico imposed retaliatory tariffs on specified products being imported into Mexico from the US. Mexico will drop half of these retaliatory tariffs when a formal agreement is signed by the two governments in June 2011. The remaining tariffs will be rescinded once the first Mexican carrier is licensed by US DOT. Mexico preserves its rights to reinstate the tariffs if the United States fails to comply with the agreement.

“Several questions remain unanswered with respect to the scope of the new program, such as whether Mexican carriers be permitted to haul household goods or hazardous materials across the border. The Safe Explosives Act, part of the Patriot Act, prohibits the handling of explosives in the U.S. by any aliens. Special rules were adopted to enable Canadian drivers to handle the shipping of explosives between the two countries.

Mexican applicants should be aware that their companies, their drivers and their equipment that is used to participate in the new program will be subject to all US laws and regulations while conducting business in the US,” Siegel says.