The Impact Of NAFTA & Mexico Trade Avenues | NAPS

February 13, 2015

Manufacturing has long been a strong industry in Mexico. However, the benefits of Mexico manufacturing and their facilities have been unavailable to consumers in the United States. This situation has suddenly changed, however, opening the borders for Equal Opportunity Trade between the two nations. The United States Department of Transportation (DOT) is cracking the doors for Mexican freight operators to cross the border into the United States, following a safety evaluation of the equipment being used to haul goods. Among the many benefits of NAFTA for Mexico, this will allow more movement of goods to neighboring countries. When the order goes through in full force, Mexican industries will be free to move goods across the border legally using long-haul services. The safety evaluation will be conducted as a pilot program that will extend over a three-year period.

The change in policy comes as part of the agreements made under the North American Free Trade Agreement (NAFTA). Mexico represents the third-largest trading partner for the United States across the globe. Opening the doors to freight trade via the US & Mexico free trade agreement is a good move when it comes to strengthening this relationship. The data from the study has already yielded good results in terms of safety for Mexico manufacturing and transportation across the border.

The study took part with the cooperation of 15 different Mexico-based companies. To date, the trucks crossed the border more than 28,000 times without incident. They were subject to safety inspections from more than 5,500 officials during this time as well. Violations related to drivers and other transportation regulations were minimal. In fact, the performance of these companies outranked the annual performance of most companies based in the United States and Canada.

Despite the good news, there are some concerns over financial fallout and outsourcing to Mexico for manufacturing. More than $2 million dollars of revenue based on tariffs will be lost to the United States on an annual basis. There have also been concerns over tariffs put in place against the United States as retaliation for not being able to engage in trade of this kind in the past. The change in policy is expected to resolve much of the tension that has built up in this regard over time. Any outsourcing to Mexico that occurs outside of the bounds of regulatory committees will be unlikely as well.

Companies engaging drivers in long-haul operations will be required to meet considerable requirements ahead of time. These legalities include possessing a valid, U.S. commercial driver’s license or a Mexican Licencia Federal de Conductor. They must also undergo drug testing from laboratories that are certified by the U.S. Department of Health and Human Services. In terms of their competency as a driver, operators will be required to pass a Pr-Authorized Safety Audit and undergo monitored hours of service on the road. The regulations and guidelines that will be required of these trucking companies and individual drivers will be very similar to those outlined for companies engaging in trade from Canada. Such controls include random and outside inspections in addition to inspections prior to crossing any border. American companies are free to move goods into Mexico for trade as well. However, only five American companies have applied to gain this authority.