3PLs & 4PLs / Economic Development / Ground

NAFTA Trade and Traffic on the Rise

U.S., Canada and Mexico working to resolve border slowdowns.

Since implementation of the North American Free Trade Agreement (NAFTA) in 1994, trade between the United States, Mexico, and Canada has more than tripled. Total merchandise trade between the three NAFTA partners reached $944.6 billion in 2010. Canada and Mexico are the U.S.’s first- and second-largest trading partners, respectively, accounting for 32.3 percent of U.S. exports in 2010.

But as the goods crossing both the U.S.-Mexican and U.S.-Canadian borders have increased as a result of NAFTA—and are expected to continue to increase well into the future—the infrastructure at border crossings has struggled to keep trucks moving in a timely manner, thanks to a variety of political, logistical and social issues.

Cross-border trucking

In March, the U.S. and Mexico announced that they had reached an agreement in principle for a permanent solution to the cross-border trucking dispute that has existed for NAFTA’s entire existence.

The agreement allows Mexican and U.S. long-haul carriers that operate safely to obtain permanent operating authority to deliver international cargo across both countries, as long as they comply with the pertinent rules and regulations.

The agreement will recognize and credit the experience and safety record of Mexican carriers that participated in a 2009 demonstration pilot. Mexican carriers that receive full operating authority in the United States will be allowed to retain it definitively.

At the same time, trade sanctions imposed by Mexico on billions of dollars of U.S. products in retaliation are being systematically phased out.

Since 1982, Mexican trucks have been allowed to travel up to 25 miles across the U.S. border. NAFTA had called for cross-border trucking to be phased in beginning in 1995, but the Clinton administration and Congress blocked implementation, citing safety concerns about Mexican trucks on U.S. roads.

In 2007, the Bush administration launched a pilot program to comply with the provision. However, Congress cut off funding and the pilot program was shut down in 2009. That led Mexico to impose the retaliatory tariffs.

U.S.-Mexico congestion

The Federal Highway Administration (FHWA) and U.S./Mexico Joint Working Committee (JWC) are currently studying travel times at four well-known congested areas along the U.S.-Mexico border. Border Wait Time Study pilots are underway at El Paso, San Diego, Nogales, and Pharr ports of entry. These studies will provide baseline data to develop performance measures to evaluate the success of improvement projects, policies, and strategies. Another area of growing concern is the Arizona-Sonora border. Travel along this border has become increasingly important to both states’ economies and, as a result, more congested.

In May, the U.S. and Mexico launched a program to expand the busiest commercial crossing over the U.S.-Mexico border, nearly doubling the capacity for trucks entering Laredo, Texas, from Nuevo Laredo, Mexico.

The program increased the number of truck lanes at the World Trade Bridge into Laredo from eight to 15, according to the U.S. Customs and Border Protection (CBP). The expansion also added an additional exit lane for vehicles leaving the facility, which currently handles around 5,000 trucks a day and has been so busy that trucks were delayed several hours.

U.S.-Canada issues

A recent study released by the Department of Economics at the University of Waterloo and Wilfrid Laurier University (both in Ontario) shows delays at U.S. and Canadian border crossings costs Canada between C$15 billion and C$30 billion every year, negatively impacting both nations’ economies.

FHWA’s STEP (Surface Transportation Environment and Planning Cooperative Research Program) funds an initiative to deploy and evaluate technologies to measure border wait times at U.S.-Canada border crossings. FHWA has partnered with the U.S. Customs and Border Protection, Canada Border Services Agency, and Transport Canada to facilitate the safe, secure movement of goods and people across U.S. and Canada land points of entry. The collaborative effort includes evaluation of wait time measurement technologies and the implementation of a pilot project in an effort to identify solutions that can meet cross-border operational needs. 

Contributing writer Ken Krizner is based in Cleveland, Ohio, where he writes often on economic development and technology issues.

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