The North American Free Trade Agreement took effect on January 1, 1994, promising to remove trade and investment barriers among the United States, Canada, and Mexico, thus leading to thousands of new U.S. jobs, a booming market for U.S. exports, and overall higher standards of living in all three countries.
The answer as to whether or not NAFTA has fulfilled its promises completely varies according to who you ask and on what side of the political fence you sit.
In September 2007, the Department of Transportation enacted a year-long Cross-Border Trucking Demonstration Project, claiming that it would help to pave the way for NAFTA's full implementation. The project opened the U.S.-Mexico border to crossings by authorized trucks from both countries, also allowing Mexican trucks to travel beyond a previous 25-mile limit.
Branded from the start with the scarlet NAFTA letters, it is no surprise that this project caused considerable amount of debate throughout DOT, industry and Congress. Critics – including environmentalists, labor groups and safety advocates – claim that Mexico does not hold it’s trucking companies to the same standards as we do in the U.S., including qualifying terms for a commercial driver’s license, hours of service or passing drug tests.
Congress recently passed a bill that cut off funding for the program, but DOT and Secretary of Transportation, Mary Peters are holding their ground with the continuation of the Cross Border project. Peters in particular is under fire as critics claim she is merely pushing a Republican political agenda to support NAFTA.
If you are in the food industry however, choosing a side in this debate may require you to transcend political borders – putting your NAFTA opinions and free-trade platforms aside. A recent letter to Congress, signed by 69 prominent food manufacturers and industry associations, urged Congress not to disrupt the Cross Border Trucking program, or restrict funding in any capacity. Signees feel this way because of fears that any further actions that reduce Mexico’s trucking freedoms will be in violation of NAFTA and cause retaliation on Mexico’s part. Retaliation could come in the form of imposed tariffs on American truckers in Mexico, restrictions on U.S. imports, and canceled contracts. It is estimated that American agriculture could stand to lose up to $2 billion per year if their shipping contracts to Mexico are cancelled.
Our proximity to Mexico creates an ideal situation for trade – and with skyrocketing fuel prices, a short drive across the border will prove far less expensive than shipping across seas. Mexico represents one of our largest export markets for products such as corn sweeteners, processed fruits, vegetables and meat, dairy and rice. Jeopardizing that relationship by violating our agreements would not only hurt our export markets but our reputation as exporters.