U.S.--MEXICO TRADE : Borderline Transit Systems : Bus Operations Are Beginning to Show Growth

Border checkpoints already choked with cars and trucks have had to make room for another form of transportation--the bus.

A small but growing number of U.S. tour bus companies have begun crossing into Mexico, and Greyhound Lines plans to expand its 6-month-old Greyhound de Mexico cross-border service.

Despite growing interest in international service, bus operators face numerous restrictions on both sides of the border that industry officials hope will be lifted, or at least eased, as a result of a U.S.-Mexico free trade treaty.

“We expect a more liberalized entry policy between both countries,” said Bernard Gaillard, director of the office of compliance and consumer assistance at the Interstate Commerce Commission, which regulates bus service.

The barriers against international busing had begun falling even before free trade negotiators started to talk.

Early last year, Mexico lifted a ban on foreign-owned tour and charter bus operators. That prompted the United Bus Owners of America, an industry trade group, to urge the U.S. government to drop a similar ban on Mexican operators. However, U.S. prohibitions remain in force, along with restrictions on scheduled bus service.

In general, foreigners are prohibited from operating intercity bus service in both Mexico and the United States. The U.S. banned most Mexican bus companies in the early 1980s, although a handful of firms that already operated in American cities were allowed to continue service. In addition, many Mexican buses operate illegally north of the border, according to transportation officials.

U.S. companies have also found ways to circumvent Mexican restrictions. By teaming up with a Mexican bus company that issues its tickets, Greyhound was able to drive buses directly into the Tijuana bus terminal instead of dropping off and picking up passengers at the border, said Ken Lobato, regional manager for Greyhound in Los Angeles.

Painted in the red, white and green colors of the Mexican flag, Greyhound de Mexico buses now make 14 daily round trips between Los Angeles and Tijuana.

Despite three other above-board competitors and countless illegal carriers, Lobato says Greyhound has seen passenger traffic increase on the route and will expand cross-border service to other cities later this summer.

While the U.S. bus industry says Mexican tour bus companies should be allowed to operate north of the border, they are less willing to open up scheduled bus service to foreign competition.

U.S. bus operators say they could not compete effectively against lower-cost Mexican firms. But they would not object to foreign firms operating through U.S. subsidiaries subject to prevailing wages, laws and taxes, says Stephen G. Sprague, vice president of the United Bus Owners of America.