NAFTA May Deliver Blow to Mexican Truckers

Sergio Lopez felt nothing but relief when he heard the news this month. The U.S. Congress had just passed a bill that would be a barrier for Mexican and U.S. truck drivers on the road to unlimited access to each other’s highways.

“I thought, ‘I’ll make it,’ ” said Lopez, a third-generation Mexican trucker who makes a good living hauling 20-ton rolls of coiled steel from the Port of Brownsville, Texas, across the border to auto plants in Saltillo, Silao and Toluca. “I won’t go broke after all.”

In the United States, the battle over access pits free traders against protectionists and Teamsters who worry that jobs and business will be lost if Mexican trucks are given rein in the United States. The vocabulary is different here but the bottom line is the same: money.

Like most Mexican truckers, Lopez fears he can’t compete against larger, more modern and more efficient U.S. fleets. Rather than fight for the North American Free Trade Agreement provision that calls for transnational trucking, Lopez and thousands of other Mexican truck owners, like their counterparts across the border, would just as soon see it die.

“We don’t want to go there and they don’t want to come here,” Lopez said.

Mexican truckers’ opposition to NAFTA is another facet of how businesses here and elsewhere in Latin America are having second thoughts about globalization. That sentiment was evident last week when thousands of farmers converged on Mexico’s capital to protest that agricultural free trade ushered in by NAFTA has destroyed their way of life.

Mexican fleet owners fear they too are on the losing end of the free-trade deal. Trucks, parts, fuel and financing are significantly more expensive for them than for U.S. fleets, putting Mexicans at a severe cost disadvantage even though their drivers are paid half of what Americans get.

The fierce opposition of rank-and-file Mexican truckers to NAFTA has been lost in the controversy over the U.S.-Mexico trucking spat that reached a high point Aug. 1, when the U.S. Senate approved a bill that would apply unusually strict safety standards to Mexican vehicles pursuing unfettered access to U.S. highways.

The bill as it stands is so politically unpalatable to Mexico that, if it were to become law, it would in all likelihood kill the NAFTA goal of giving U.S., Canadian and Mexican trucks a green light to compete throughout the hemisphere. Mexican politicians say the U.S. bill is discriminatory in that it imposes tougher safety standards on Mexican trucks than on U.S. or Canadian vehicles.

The bill has become a delicate political issue for Presidents Bush and Vicente Fox as they try to forge a new era of cooperation on issues such as immigration, drug enforcement and water. Bush has promised to veto the bill unless a compromise is worked out, and the Fox administration so far is holding him to it. Mexico says it will pursue billions of dollars in damages it may be entitled to under the appeal process of NAFTA, unless its truckers get a better deal.

But truckers want immediate action. After months of simply demanding that Mexico truckers receive equal treatment, the largest Mexican trucking industry trade group, Canacar, which represents owners of 78% of Mexican commercial trucks, recently has gone on the offensive. Canacar says it wants the Mexican government to declare the NAFTA trucking provision null and void.

“We don’t want your help, President Bush. We don’t want to go there. The economic factors are all against us,” said Canacar President Manuel Gomez Garcia, who is also a trucker based in Reynosa, Mexico.

Key Mexican Senator Is Sympathetic

A powerful member of the Mexican Senate, which has jurisdiction over trade matters, said Tuesday that he is sympathetic to Canacar’s petition and that the Senate’s Commerce Committee, which oversees transport issues, has decided to support abandoning the NAFTA trucking concept.

“We are drafting a letter for Economy Secretary Luis Derbez asking for the suspension of benefits on this NAFTA issue, a technical term which means the cancellation of the trucking clause,” said Sen. Humberto Roque Villanueva of the Commerce Committee.

The demise of the NAFTA trucking initiative, if it happens, probably would reinforce the status quo that gives Mexico and U.S. trucks access only to “commercial zones,” or the 25 miles on either side of the 2,000-mile long U.S.-Mexico border.

That would be fine with Lopez, a 35-year-old University of Texas graduate who owns a fleet of 46 trucks. He and other Mexican fleets control about 80% of “transfer” cargo, as the trans-border trucking business is called.

“Mexicans like the system as it is,” said Rodolfo Gonzales, another Matamoros fleet owner who specializes in hauling steel, paper and plastic from over the border in Brownsville to Mexican manufacturers and wholesalers. “If someone would ask me to drive to Chicago, I would say no, because it’s not an equal competition.”

The Fox administration says it has no intention of dropping the issue, however.

Describing NAFTA opposition as “myopic,” Economy Secretary Luis Derbez said Monday that trucking competition with the United States is the best way to make Mexican transportation more efficient. About 80% of the nation’s trade is transported by truck.

Mexico prevailed before a NAFTA dispute panel in February that said the United States had violated NAFTA by not implementing trucking provisions in December 1995. Derbez says the ruling entitles Mexico to a huge damages claim against the United States unless the borders open to Mexican truckers, a settlement that requires Mexico to persevere with its NAFTA claim.

In agreement with Derbez and opposed to Canacar are two smaller Mexican trucker groups that represent larger modern independent fleets owned or contracted out by big manufacturers such as baking giant Grupo Bimbo, Cerveceria Modelo and Coca-Cola. They see NAFTA as an opportunity to cut costs and also to attract investment.

“The treaties have to be respected,” said Miguel Angel Bres Garcia, president of the Mexican Assn. of Transporters and owner of a modern 135-vehicle fleet based near Mexico City. “Besides, Canacar is afraid of something that will never happen. U.S. truckers are not going to invade Mexico with NAFTA. They have had the opportunity in the past and haven’t taken it.”

Some See Opportunity

Up to now, U.S. fleets have tended to stay away from the limited Mexican trucking business available to them for a variety of reasons, including fear of crime, poor roads and the inability of U.S. drivers to speak Spanish. Mexican fleet owners, by the same token, say they would be no match for U.S. fleets competing on their home turf, at least on longer hauls.

Martin Rojas, the American Trucking Assn.’s director of cross-border operations, agreed that for many large U.S. trucking firms, the appeal of NAFTA lies in the potential for investing in Mexican concerns and in forming joint ventures in Mexico, not necessarily in sending trucks to Mexico.

The Washington-based American Trucking Assn., which represents 30,000 U.S. trucking companies, favors implementing the NAFTA trucking provision.

The Mexican Assn. of Private Transport, a truckers association whose members include giant cement manufacturer Cemex, Bimbo and Coca-Cola, said NAFTA and the competition it would bring would improve transportation efficiency, partly by eliminating in some cases the costly border-transfer process by which cargo is handed off from one nation’s trucks to the other.

“Canacar is five times larger than our fleet. You have to remember that what interests us is productivity and efficiency. But by having more trucks, [Canacar] has more political weight even though they are less efficient,” said Leonardo Gomez, president of the private transport group.

Matamoros trucker Lopez, who is a regional Canacar president, says what interests him is survival. NAFTA would open up his steel-delivery routes to U.S. competitors that already are exploiting a weak competitive link: that he offers customers 45 days to pay, a fraction of the six months’ terms some giant U.S. trucking firms offer.

“Mexico is now what the United States was 40 years ago in trucking, at the baby stage. I want to have a chance to do the same thing that a lot of U.S. companies did, starting off with a couple of trucks and growing to 1,000. But if NAFTA happens, that dream would be wiped away. I would go from being an entrepreneur to an employee very quickly,” Lopez said.

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A Cost Comparison

Mexican truckers are at a significant cost disadvantage with U.S. truckers and are fearful of the consequences of opening up the border to give each nation’s drivers unlimited access to the other’s highways. How some costs break down:

Vehicle

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Mexican trucker U.S. trucker New Volvo or Freightliner tractor-trailer truck $97,000 $60,000

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Financing

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Mexican trucker U.S. trucker Interest, based on a 3-year loan 12-24% 6-8% Total cost of truck $131,920-$166,840 $70,800-$74,400

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Fuel

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Mexican trucker U.S. trucker Per gallon of diesel; U.S. price in Texas border towns $2.10 $1.40

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Parts

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Mexican trucker U.S. trucker Diesel filter $20 $8-$10 Michelin truck tires $340 each $260 each

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Annual wages

$20,000 $40,000

Sources: Mexican National Chamber of Freight Transport, American Trucking Assn.

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Researcher Rafael Aguirre in The Times’ Mexico City Bureau contributed to this report.