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Mexican Trucking and Free Trade Agreement Case Study


The North American Free Trade Agreement (NAFTA) is aimed at the removal of customs barriers and encouragement of the movement of goods and services between NAFTA countries as well as the creation and maintenance of conditions for fair competition in the free trade zone.

It supposes great benefits both for Mexico and the United States. Among the potential benefits, one might note the reduction of costs of transportation due to the cancellation of unloading and reloading processes. It also lowered the time and money expenditure connected with the storage and warehouse of goods. In addition, NAFTA contributed to the decrease in the cost of road transportation. Therefore, the honor of the treaty promotes benefits as for countries engaged in the NAFTA in general as well as for truck drivers.

In spite of the advantages of the agreement, it met the opposition of Teamsters Union drivers. The absence of rigorous safety and environmental standards motivated Teamsters to object to the trucking provision of the NAFTA. The Teamsters Union stated a list of objectives against the NAFTA concerning Mexican drivers’ working conditions and state of their trucks. In particular, they claimed that Mexico has older and, therefore, more dangerous trucks than the United States and does not take into account hours drivers could spend during the truck repair.

What is more, Mexico does not take off the road those drivers who had a severe traffic violation on their own vehicle. The mentioned objectives seem quite fair and reasonable. However, Congress set 22 obligatory standards for Mexican trucks to enter the United States, supporting the position of Teamsters. This measure was initiated to ensure the safety of drivers, products, and road traffic in general.

After that, the United States government tried to defuse the situation and introduced a pilot program that allowed 100 Mexican companies to enter the United States, passing its safety inspections. As a result, Mexican drivers demonstrated better safety records. On this account, the objectives of the Teamsters Union became unfair. Ultimately, as per Teamsters request, Congress attached the amendment a spending bill.

In return, Mexican government established punitive tariffs according to the NAFTA. It goes without saying that it made considerable economic sense for the United States as the tariffs contained $ 2.4 billion. In particular, plenty of goods from different states were influenced by increased tariffs. For example, California, an agricultural exporter of table grapes and its derivatives including almond, wine, and juice faced 45 percent and 20 percent tariffs respectively. The major exporter of pears – Washington suffered 20 percent tariffs.

The list of states also consisted of Illinois (tableware), North Dakota (oil seeds), and others. It is rather significant to stress that above examples confirm the fact that the United States faced serious costs. Additionally, according to the U.S. Chamber of Commerce, it costs 25.600 American jobs.

Thus, it should be emphasized that it seems obvious that the current situation remains to be addressed to suit both the Congress’s point of view to ensure the safety of the trucking system and provide citizens with jobs and the necessity to decrease Mexican punitive tariffs. As a result, all the measures should be taken to meet the initial purpose of NAFTA that is the removal of barriers of the trucking system between Mexico and the United States.

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IvyPanda. (2020, September 7). Mexican Trucking and Free Trade Agreement. Retrieved from https://ivypanda.com/essays/mexican-trucking-and-free-trade-agreement/

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"Mexican Trucking and Free Trade Agreement." IvyPanda, 7 Sept. 2020, ivypanda.com/essays/mexican-trucking-and-free-trade-agreement/.

1. IvyPanda. "Mexican Trucking and Free Trade Agreement." September 7, 2020. https://ivypanda.com/essays/mexican-trucking-and-free-trade-agreement/.


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IvyPanda. "Mexican Trucking and Free Trade Agreement." September 7, 2020. https://ivypanda.com/essays/mexican-trucking-and-free-trade-agreement/.

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IvyPanda. 2020. "Mexican Trucking and Free Trade Agreement." September 7, 2020. https://ivypanda.com/essays/mexican-trucking-and-free-trade-agreement/.

References

IvyPanda. (2020) 'Mexican Trucking and Free Trade Agreement'. 7 September.

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