U.S. Looks to End Mexico Truck Fight

The Obama administration launched a bid to resolve a festering trade dispute with Mexico over allowing foreign truckers onto U.S. roads.

Transportation Secretary Ray LaHood said Washington would seek talks with Mexico over a U.S. ban on that country's trucks operating north of the border. The ban has prompted Mexico to slap punitive tariffs on some $2 billion in U.S. goods.

View Full Image

Getty Images

Mexican trucks enter the U.S. in March 2009, the month Washington ended a pilot program allowing them in.

Mr. LaHood sent a blueprint to Congress outlining principles the White House would push. Mr. Obama could end the ban without congressional approval, but he is seeking to get key Democrats and others on board.

The transportation secretary said a formal proposal could emerge in coming months, and another U.S. official said the goal was to have the nearly two-year-old ban lifted "as soon as possible."

A Mexican official said that while Mexico welcomed the proposal, it was "just an initiative" and would not yet prompt the country to lift the punitive tariffs. Mexico says the ban violates the North American Free Trade Agreement.

The White House move will anger some Democratic lawmakers and unions that have opposed lifting the ban on the grounds that Mexican trucks are unsafe and the move would kill U.S. jobs.

International Brotherhood of Teamsters President Jim Hoffa said Thursday he was "deeply disappointed" by the White House proposal.

"Why would the DOT propose to threaten U.S. truck drivers' and warehouse workers' jobs when unemployment is so high?" he said.

A congressional ally of the union, Rep. Peter DeFazio (D., Ore.), would call for a hearing on the matter, his spokeswoman said.

But the White House has been under increasing political and economic pressure to resolve the dispute. Mexico's retaliatory tariffs have hit dozens of American products, from apples to pork to pistachios. That has angered powerful U.S. industries and their congressional allies, who say thousands of U.S. jobs have been lost or jeopardized as a result.

Mexico is one of the U.S.'s biggest trade partners, and the spat has hampered the Obama administration's goal of expanding U.S. exports to create jobs.

"If we're going to double exports within five years, we must hold on to export markets, such as Mexico, where American companies are already doing well," said U.S. Chamber of Commerce President Thomas Donohue.

Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, a Washington think tank, said the move by the White House reflected a shift in the Obama administration's approach to free-trade issues.

"It's another tilt in the direction of pulling trade policy out of the basement, up into at least the first floor," Mr. Hubauer said.

He noted that the White House announcement came on the day that President Obama selected as his chief of staff William M. Daley, who helped the Clinton Administration push the North American Free Trade Agreement through Congress in the early 1990s.

Tensions over Mexican trucks operating in the U.S. heated up in early 2009 when Mr. Obama, shortly after taking office, signed legislation canceling a pilot program that had allowed Mexican trucks to carry cargo on U.S. roads.

The Teamsters union argued that Mexican trucks were unsafe, that some drivers didn't know English and that Mexican authorities didn't keep adequate safety records on drivers.

Mr. LaHood's blueprint says U.S. regulators will screen Mexican truckers for compliance with safety regulations, and keep tabs on their operations.

—Paul Kiernan
contributed to this article.

Write to Josh Mitchell at joshua.mitchell@dowjones.com

rep peter defazio, international brotherhood of teamsters, ray lahood, jim hoffa, peter defazio, punitive tariffs, image getty, retaliatory tariffs, congressional allies, democratic lawmakers, mexican trucks, formal proposal, brotherhood of teamsters, warehouse workers, union rep, pilot program, economic pressure, congressional approval, trade dispute, transportation secretary
qtdz
Online.wsj.com