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Nov.24, 2014

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COMMENTARY 24 THE JOURNAL OF COMMERCE By Nelson Balido NOVEMBER 24.2014 DEMOCRATIC POLITICS IN the early 1990s looked a lot different than they do today. Many electoral handicappers gave the Democratic field, populated by some liberal populists, long odds in the 1992 election, with incumbent President George H.W. Bush basking in the glow of a Gulf War rout and enjoying high poll numbers. The idea that a governor from Arkan- sas, one of a dwindling number of southern Democrats, could run a credible campaign — much less win the White House — seemed a pipe dream, especially in a party still shak- ing off the haze of the doomed campaigns of Walter Mondale and Michael Dukakis. But Bill Clinton didn't run as a tradi- tional Democrat. Instead, he supported things such as greater choice in education, and pro-business agenda items such as free trade. Organized labor certainly helped his campaign, but he didn't owe his victory to the one-time prime mover in traditional Democratic politics. The 1992 Clinton-Gore ticket burnished its New Democrat agenda by supporting — albeit lukewarmly at first — passage and implementation of the North American Free Trade Agreement, which would create a super-trade bloc of the United States, Canada and Mexico. In the first year of the Clinton presidency, the administration went all-in to get NAFTA passed through Congress. Despite one-time electoral rival Ross Perot's warning of the "giant sucking sound" of jobs leaving the U.S., the argument that knocking down high tariffs and opening new markets were critical to allowing U.S. manufacturing to grow won over Congress and the public. In November 1993, Congress passed the agreement and the president signed it into law on Dec. 8, 1993. Organized labor had been dealt a setback. Suddenly, it no longer had the same sway over Democratic members of Con- gress it had once enjoyed. Trucking was the area where labor could shift the trade debate. Under NAFTA, trucks from Mexico were to be able to enter the U.S. interior carrying loads originating in Mexico. The inefficient border zone loading and unload- ing was to be a thing of the past. The Teamsters and their allies took aim at NAFTA's trucking articles with a level of rhetoric that bordered on the absurd. Rep. Pete DeFazio, D-Ore., referred to Mexican trucks as "rumbling death traps." North Dakota Democratic Sen. Byron Dorgan took to the Senate floor to give a speech on the Mexican trucking industry that would have listeners believe Mexican trucks were held together with chewing gum and bail- ing wire, were driven by drivers who were, at best, overly tired, and at worst, under the influence of drugs or alcohol. The leadership of the U.S. Department of Transportation came under fire, too. The Teamsters in 2008 called for the firing of Transportation Secretary Mary Peters in a nasty campaign featuring radio ads, direct mail and attack ads befitting a contested congressional race. Attempts to allow Mexican trucks beyond the border zone under pilot programs came and went without success. In 2007, the Bush administration launched a limited pilot pro- gram to permit Mexican-domiciled trucks to the U.S. interior. That pilot is known more for the court battles it sparked than for any substantive changes to cross-border logistics. Mexico was growing impatient. Under the terms of NAFTA, Mexico could have slapped retaliatory tariffs on U.S. goods, making them more expensive in the Mexican market and hurting overall U.S. competitiveness. Sud- denly, the debate was about more than the transportation world. Members of Congress in breadbasket states risked their states' exports losing a foothold in the world market. With sanctions looming, it was up to the Obama administration to try again. In the fall of 2011, the Federal Motor Carrier Safety Administration began a three-year pilot pro- gram to allow Mexican long-haul carriers to operate throughout the United States. To par- ticipate, the Mexican carriers had to undergo a rigorous review before being granted entry. The program was hardly a hot ticket. From 2011 through last month, only 13 Mexican companies received permission to participate, fueling critics' charges that so few companies participated in the pilot that there was nothing of substance to glean from the program. Was that because the regulations placed on the Mexicans were so onerous, or was it because of lack of interest? The long-established cross-border trade routes aren't going away overnight if and when full access to the U.S. interior is granted to Mexican carriers. Distribution centers in border cities such as El Paso and Laredo have existed for decades because they provide shippers the ability to get goods to market reliably. Tough U.S. hours-of-service rules imposed on driv- ers aren't likely to be rescinded. And without well-established business relationships, Mex- ican carriers will be hesitant to make the trip into the interior unless they can bring back full trailers to Mexico. All of this amounts to a trucking system unlikely to prove attractive to more than a few Mexican carriers. But despite what looks like minimal impact on binational cross-border trade, the inability to put the NAFTA trucking issue to rest should serve as an embarrassment to the U.S. That we can't come to some com- monsense agreement with one of our largest trading partners and southern neighbor unnecessarily taints what should be one of our strongest strategic relationships. Meanwhile, we negotiate other trade deals, further staining our credibility. How can we be trusted to carry out new agree- ments in good faith if we can't even be counted on to implement something that, in the scheme of world trade, is so trivial? It's long past time for the U.S. to solve this issue. But if past performance is an indi- cation of future results, I'm not holding my breath. JOC Nelson Balido is managing principal at Balido and Associates, chairman of the Border Commerce and Security Council, and former member of the Homeland Security Advisory Council. Contact him at and follow him on Twitter: @nelsonbalido. RIGHTING A CROSS-BORDER TRUCKING WRONG

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