Washington farmers and their advocates celebrated Wednesday as U.S. Transportation Secretary Ray LaHood signed a deal with Mexico to end a two-year trucking dispute.
The deal calls for retaliatory tariffs on American products exported to Mexico to be dropped by 50 percent within 10 days, and eliminated altogether once Mexican trucks again are allowed to cross the American border.
“This is good news,” said Washington Agriculture Director Dan Newhouse, also a longtime Sunnyside farmer. “From our perspective, it felt like we were being almost unfairly punished. There was no reason (for farmers) to be in the middle of that. It had a pretty detrimental effect on our exports to Mexico.”
Sen. Maria Cantwell, D-Wash., described the agreement as a “major step forward for Washington agriculture.”
“With the removal of these barriers, Washington farmers will be better able to compete fairly in the Mexican market,” Cantwell said.
But not everyone was happy with the deal Wednesday.
An association representing independent truckers criticized LaHood for signing the agreement before providing the public or Congress with the final details.
“So much for their supposed transparency,” said Jim Johnston, president of the Owner-Operator Independent Drivers Association. “Seems like the administration is dead set on caving to Mexico’s shakedown regardless of the cost to the American public and our tax coffers.”
The Mexican government imposed tariffs in April 2009 on a lengthy list of American exports after Congress put the brakes on a pilot program that allowed a limited number of Mexican trucks full access to U.S. highways, even though banning the trucks contravened terms the two countries had negotiated in the North American Free Trade Agreement.
The initial list of tariffs included such key Washington crops as potatoes and cherries. Mexico is the one of the biggest international export markets for Washington’s frozen potatoes.
The Mexican government adjusted the tariff list Aug. 18, 2010, to reduce the potato tariff from 20 percent to 5 percent, but added apples to the list with a 20 percent tariff.
“The more time it was in effect, Mexico was finding alternative sources for those fruits and vegetables,” Newhouse told the Herald.
Matt Harris, trade director for the Washington State Potato Commission in Moses Lake, said the tariff on potatoes allowed Canada to expand its exports to Mexico — while trucking them south on American roads.
“Canada could literally drive their trucks through the U.S. and deliver tariff-free french fries to consumers in Mexico,” Harris said. “That’s when a lot of damage occurred. Overall, there were losses in the millions of dollars.”
He noted that a Lamb Weston frozen potato processing plant in Prosser closed while the tariff was in effect.
“These tariffs don’t benefit anyone, especially when they occur to an industry that has relatively no bearing on a program allowing Mexican trucks in the U.S.,” Harris said. “We’re glad to see this (deal) finally come to bear.”
Now that the tariffs are set to end, Newhouse said, the state Agriculture Department may consider a trade mission to the country to re-establish markets for Washington products.
“The timing might be very good to reintroduce ourselves and give them the message that we’re open for business,” Newhouse said.
The deal LaHood signed Wednesday calls for a new long-haul trucking program to replace the one shut down in 2009, but it also requires the Mexican trucks to comply with all U.S. federal motor vehicle safety standards, and to have electronic monitoring systems to track compliance with hours-of-service rules.
The U.S. Department of Transportation also will review the complete driving record of every trucker, require samples for drug testing by U.S. labs, and require that drivers understand English and can read American traffic and road signs.
Safety standards for the Mexican trucks have been a point of contention during the two years of negotiations to end the tariffs.
“The agreements signed today are a win for roadway safety, and they are a win for trade,” LaHood said in a written statement Wednesday. “By opening the door to long-haul trucking between the United States and Mexico, America’s third largest trading partner, we will create jobs and opportunity for our people and support economic development in both nations.”
As part of the agreement, Mexico will allow U.S. long-haul trucks to operate south of the border.
Washington’s congressional delegation also celebrated the new agreement Wednesday, but some with caveats.
Sen. Patty Murray, D-Wash., described the agreement as good news for farmers, but called on Mexico to cease all tariffs now rather than phasing them out.
“Now that the agreement is signed, there is no reason why farmers and growers in my home state of Washington should have to wait any longer,” Murray said in a statement. “They have nothing to do with this dispute, and it is deeply unfair that they continue to be punished for it.”
Rep. Doc Hastings, a Pasco Republican, also described the agreement as good news, but noted the tariffs have cost the nation billions and should have been resolved sooner.
“Since these tariffs were imposed over two years ago, I have worked to see a common-sense program put in place that will keep our roads safe, and not punish Washington state’s job creators,” Hastings said in a statement. “With our economy struggling to recover, today’s resolution is long overdue — however welcome — news for Washington agriculture, specifically potatoes, cherries, pears and apples.”
“The Obama administration has dragged their feet for over two years and therefore cost Washington growers and processors millions,” Hastings said. “It is time for our growers to quit paying the price for our nation’s failure to uphold our treaty obligations to one of our largest trading partners.”