OOIDA welcomes the official launch of USMCA

Wednesday, July 1, marked the end of the North American Free Trade Agreement and the beginning of the United States-Mexico-Canada Agreement. Many, including the Owner-Operator Independent Drivers Association, are welcoming the change.

After nearly three years in the making, USMCA officially launched on July 1. USMCA updates and replaces NAFTA, including provisions to protect the interests of U.S. long-haul truckers. OOIDA has worked with the United States trade representative, members of Congress, committees of jurisdiction, and industry partners since the beginning of negotiations back in 2017 to amend the original NAFTA cross-border trucking provisions that harmed American small-business motor carriers and jeopardized highway safety.

“The USMCA creates a thorough review process to identify and remove Mexico-based carriers and operators that pose material economic harm to American truckers,” OOIDA President Todd Spencer said. “This means greater scrutiny of entities in cross border trucking and enforcement of labor provisions.”

The start of USMCA comes despite 19 members of Senate Finance Committee having urged U.S. Trade Representative Robert Lighthizer to delay the launch date.

Cross-border trucking

One provision in USMCA reads “the United States reserves the right to adopt or maintain limitations on grants of authority for persons of Mexico to provide cross-border long-haul truck services in the territory of the United States outside the border commercial zones if the United States determines that limitations are required to address material harm or the threat of material harm to U.S. suppliers, operators, or drivers.”

“Material harm” means a significant loss in the share of the U.S. market for long-haul truck services held by persons of the United States caused by or attributable to persons of Mexico. Essentially, this restricts Mexican carriers to the border commercial zones.

OOIDA was active during the USMCA negotiation process, including in support of this provision.

OOIDA President Todd Spencer provided testimony to the U.S. trade representative in June 2017. During negotiations, OOIDA’s Washington, D.C., staff met with lawmakers to educate them on the problems with the current cross-border trucking program. Additionally, OOIDA Board Member Johanne Couture attended formal negotiations.

“OOIDA is supportive of the annex language which establishes a regulatory process for restricting Mexican trucks to the commercial border zones,” said Jay Grimes, OOIDA director of federal affairs. “We believe the provision will help end the current program that allows Mexican carriers and drivers who are not held to the same, rigorous U.S. safety, security or environmental regulations to operate on American roadways. OOIDA will continue working with the Administration and Congress to ensure that this language remains in any ultimately approved agreement.”

Cabotage

Cabotage, or the transportation of goods or passengers between two places in the same country by an operator from another country, is also addressed in USMCA: “Only persons of the United States, using U.S.-registered and either U.S.-built or duty-paid trucks or buses, may provide truck or bus services between points in the territory of the United States.”

In regard to cross-border trucking, this allows Mexican carriers to make deliveries from Point A in Mexico to Point B in the United States and vice versa. Mexican carriers will not be allowed to both pick up and deliver within the U.S.

Operating authority from the U.S. Department of Transportation for carriers that adhere to U.S. regulations is required. Grants of authority for the provision of truck services by persons of Mexico between points in the United States for the transportation of goods other than international cargo are subject to reciprocity.

OOIDA will continue working with the administration and Congress on behalf of small-business truckers to ensure that cross-border trucking is a fair and mutually beneficial endeavor through USMCA.

“This will hopefully prevent or reduce Mexico-domiciled carriers that are exploiting our laws from operating on U.S. highways, which has significantly lowered wages for American drivers across numerous segments of trucking,” Spencer said.