According to press reports earlier this week, Mexico’s National Cargo Transportation Association (Canacar), which represents about 4,500 trucking companies, has filed a $6 billion lawsuit against the United States for not complying with the trucking provision of NAFTA. This action follows the $2.4 billion in punitive tariffs Mexico slapped on U.S. exports back in March (see “A Trade War with Mexico“).
The bottom line: It appears that Mexico will continue to go on the offensive on this issue until Congress takes some action to resolve it.
And some action is happening, according to comments made by Transportation Secretary Ray LaHood at a National Press Club event a couple of weeks ago. LaHood is reportedly lobbying former colleagues in the House of Representatives to come up with a solution that satisfies Mexico, the Teamsters, and safety advocates. In a Logistics Management article, LaHood is quoted as saying, “I hope we can have a Mexican program reinstated. This is part of NAFTA; this is part of something we need to do. We’ve put together a very good proposal. It’s being vetted by Congress.”
But this is arguably not the biggest transportation issue on Congress’ plate. On Tuesday, Oklahoma’s James Inhofe, the highest ranking Republican on the Senate Environment & Public Works committee, said the following: “We recently learned that the Highway Trust Fund will run out of money some time before August of this year, and will require an infusion of $5 to $7 billion to get through the rest of fiscal year 2009.” According to press reports (see here and here), the government will likely have to inject an additional $8 billion to $10 billion into the fund in 2010.
(Is it me, or has keeping track of all these billions becoming more difficult?)
The constant bailout of the Highway Trust Fund is something that I’ve written about before (most recently in “California: The Next Federal Bailout?“), and the bottom line remains the same: our transportation infrastructure needs an upgrade, otherwise it will become a constraint on economic growth, and we have to figure out a way to pay for it, which implies increased taxes or other fees down the road.
Stay informed of what’s happening on both these fronts because they will matter to you at some point, whether in how you manage your cross-border shipments or in how you manage new transportation costs (see “Carbon Tax, VMT Fees, and Future Transportation Costs“). We’ll do our part to help you stay informed via our daily blog postings and the “News Roundup” section at Logistics Viewpoints.
