CLINTON MAY ALLOW MEXICAN TRUCKS TO ENTER BORDER STATES

JOANNA RAMEY

WASHINGTON (FNS) -- President Clinton, during his trip to Mexico next month, may finally announce an easing of cross-border traffic, allowing Mexican trucks to travel into the four border states of the United States.

White House officials have privately advised trucking liberalization advocates that this could indeed be the case, a move expected to eventually bring efficiencies to transporting food and other products in and out of Mexico. However, sources point out there are still political considerations to overcome before this provision of the North American Free Trade Agreement becomes a reality.

An announcement has been on hold since the White House, facing a Dec. 18 deadline under NAFTA, balked at giving Mexican trucks and their drivers the green light to make deliveries in Texas, New Mexico, Arizona and California.

In delaying NAFTA's trucking provisions, the administration cited the need to iron out safety concerns over Mexican trucks raised by consumer and insurance groups, as well as the Teamsters union, which advocates a permanent ban on lower-wage Mexican drivers entering the United States.

The delay has become a knotty diplomatic issue for Clinton, drawing ire from Mexican as well as U.S. trucking officials, who argue the administration can't renege on a key NAFTA provision without leaving other parts of the pact open for renegotiation.

With such pressure to stick to NAFTA, the administration has been addressing safety concerns and has told trucking liberalization advocates that Clinton's mid-May visit to Mexico is the deadline for making an announcement. Since this is the president's first visit to Mexico and the trip is intended to reaffirm U.S. confidence in the country and NAFTA, observers say Clinton would be hard-pressed not to announce that trucking liberalization is moving forward.

"The story we've been getting is the Clinton administration wants to make an announcement soon," said Robin Lanier, vice president of international trade at the International Mass Retail Association here. "In effect, they are renegotiating the deal. The issue is of importance to our members on the border and in Mexico and ultimately of huge importance for anyone looking at Mexican operations."

"We do support free trade and those policies that will continue NAFTA's progress," a spokeswoman for the Food Marketing Institute here said. The FMI is also keeping an eye on trucking liberalization.

Nevertheless, those pushing for permitting Mexican trucks to enter the United States say they're not entirely sure this deadline will be met.

"We understand they are close to a plan," said Linda Bauer Darr, vice president of international affairs at the American Trucking Association, based here. "The administration has certainly indicated they are committed to doing this and they haven't said they are thinking differently, but there is an interesting political environment out there today."

While trying to please its trading partners, the administration is also faced with trying to please organized labor, which in the past has been turned away by the White House on NAFTA issues. The Teamsters union, capitalizing on the drug scandals in Mexico's military and government -- and anti-Mexico sentiments in Congress regarding this issue -- argues trucking liberalization will mean more drugs being smuggled into the United States. Furthermore, it says maintenance on Mexican rigs varies greatly and there aren't enough inspectors to turn back unsafe vehicles, a concern also raised by the National Association of Independent Insurers, which represents about one-third of commercial truck companies in the United States.

For its part, the administration remains virtually silent on the progress it's making in the trucking talks. Calls to Department of Transportation officials on the issue weren't returned. However, a statement released last week by trade ministers from the United States, Mexico and Canada, following the fourth NAFTA Commission meeting in Washington, noted that trucking is still on the table.

"We discussed a range of cross-border transportation issues and reiterated our interest in resolving outstanding matters while recognizing our transportation officials are specifically addressing that agenda," the statement read.

Trucking provisions under NAFTA have been among the most knotty to implement since the free-trade pact went into effect Jan. 1, 1994. The first phase of liberalization, allowing Mexican trucks to unload trailers within commercial zones just within border states, faced a similar delay in implementation. As it now stands, trailers going in either direction are dropped at or near the border for pickup either by a U.S. or Mexican driver and rig, depending on the direction of the cargo.

The goal under NAFTA is to have Mexican, U.S. and Canadian trucks travel freely about North America, using the same drivers and rigs, by the year 2000. This open passage is considered by business to be key to having shipments move efficiently and at the lowest cost.

Nevertheless, while opening northbound traffic to the four border states is a step in the right direction, trucking liberalization advocates say this initial step won't mean any immediate savings or efficiencies.

"It takes a day for a trailer to clear Customs, so what's a driver going to do, sit around for a day?" asks Tom Eye, international distribution manager for J.C. Penney Co., reflecting the reality that moving cargo to and from Mexico is more involved than just driving across the border.

Companies like Penney that import goods from Mexico, as well as have operations in the country, have seen cross-border service improve over the last few years as U.S. trucking companies have forged alliances with Mexican counterparts. For Penney, a delivery from Mexico to reach its distribution center in North Carolina takes about two days.

Still, as Mexican truckers are given more flexibility to move about the United States, there will inevitably be more competition, which means better service and lower prices.

Don Michie, chairman of the Border Trade Alliance Transportation Committee, said he expects a few Mexican transportation companies to eventually set up services in the United States to compete for business.

Michie added that under NAFTA Mexican truckers will also be able to transport goods to Mexico that are imported into the United States from outside North America.