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US To Work To Resolve Mexican Trucking Dispute


US To Work To Resolve Mexican Trucking Dispute



WASHINGTON -(Dow Jones)- The Obama administration said Thursday it would enter talks with Mexico designed to lift a U.S. ban on Mexican truckers operating north of the border, a key shift that business groups saw as a move toward more open trade policies.

U.S. Transportation Secretary Ray LaHood sent a blueprint to Congress outlining principles the White House would push in attempting to resolve the conflict. He 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 the country was “optimistic” a deal could be reached soon but cautioned that a resolution has been elusive in the past.

The White House risks angering some Democratic lawmakers and powerful unions that have opposed lifting the ban on the grounds that such a move would reduce trucker safety standards and kill U.S. jobs. The International Brotherhood of Teamsters strongly denounced the plan. And a union ally, Rep. Peter DeFazio (D., Ore.), instantly pushed 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 in the past year has imposed tariffs on dozens of American products representing more than $2 billion in U.S. exports, from apples to pork to pistachios, in retaliation to the truck ban. 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 a key trade partner, and the spat has hampered the Obama administration’s goal of expanding U.S. exports to create jobs.

U.S. Chamber of Commerce President Thomas Donohue said the start of talks was “very welcome” and that the dispute must be resolved so the U.S. complies with international trade agreements. “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,” he said in a statement.

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 key shift in the Obama administration’s approach to trade issues.

“It’s another tilt in the direction of pulling trade policy out of the basement, up into at least the first floor,” Hufbauer said.

He said he believed it wasn’t a coincidence the White House announcement came on the day that President Obama selected as his chief of staff William M. Daley, who successfully pushed the North American Free Trade Agreement through Congress in the early 1990s.

The trucking dispute has been around since the late 1990s but most recently emerged in 2009 when 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 are unsafe, that some drivers don’t know English and that Mexican authorities don’t keep adequate safety records on drivers.

Obama could end the ban without congressional approval, but that carried the risk of an election-year backlash from unions and some Democrats.

Teamsters General President Jim Hoffa said 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? And why would we do it when drug cartel violence along the border is just getting worse?” he said in a statement.

–By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@ dowjones.com

–Elizabeth Williamson contributed to this report.

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