...Case study 9, NAFTA and Mexican Trucking. 1. What are the potential economic benefits of the trucking provisions in the NAFTA treaty? Who benefits? Who might lose? 2. What do you think motivated the Teamsters to object to the trucking provisions in NAFTA? Are these objections fair? Why did Congress initially align itself with the Teamsters? * The Teamsters object the trucking provisions in NAFTA because the greater competition from Mexican trucking firms would lower the price of road transportation within NAFTA. * The Teamsters Union also argued that Mexican truck drivers had poor safety records and that Mexican trucks did not adhere to the strict safety and environmental standards of the United Sates. * The president of Teamsters, James Hoffa, says that Mexican trucks are older, dirtier, and more dangerous than American trucks. American trucks drivers are taken off the road if they commit a serious traffic violation in their personal vehicle. That’s not so in Mexico. Limits on the hours a driver can spend behind the wheel are ignored in Mexico. * The Congress initially align itself with the Teamsters during the Bush administration which approved a measure setting 22 new safety standards that Mexican trucks would have meet before entering the United States. 3. Did it make economic sense for the United States to bear the costs of punitive tariffs as allowed for under NAFTA, as opposed to letting Mexican trucks enter the United States? *...
Words: 1152 - Pages: 5
...Carbaugh, Journal of International and Global Economic Studies, 4(1), June 2011, 1-10 1 NAFTA and the U.S.-Mexican Trucking Dispute Robert J. Carbaugh* Central Washington University ______________________________________________________________________________ Abstract Although the charter of the North American Free Trade Agreement established a schedule that would have opened the border states of the United States to competition from Mexican trucking companies in 1995, and all of the United States to this competition in 2000, the full implementation of these provisions has been delayed due to concerns about the safety of Mexican trucks and drivers. This delay has resulted in much frustration for Mexico, which, in 2009 implemented retaliatory tariffs on products imported from the United States. In March, 2011 the two countries unveiled a deal to resolve this dispute which could help ease tense relations between the two neighbors. This paper discusses the nature and significance of the trucking dispute between Mexico and the United States. Keywords: Transportation, trucking, NAFTA JEL classification: A10, F13, F23 ______________________________________________________________________________ 1. Introduction The economic ties between Mexico and the United States are of importance to policymakers because Mexico borders the United States and because of the significant economic links connecting the two countries. It is also of strategic importance for the United...
Words: 4777 - Pages: 20
... assignment NAFTA and Mexican Trucking When the North American Free Trade Agreement (NAFTA) went into effect in 1994, the treaty specified that by 2000, trucks from each nation would be allowed to cross each other's borders and deliver goods to their ultimate destination. The argument was that such a policy would lead to great efficiencies. Before NAFTA, Mexican trucks stopped at the border, and goods had to be unloaded and reloaded onto American trucks, a process that took time and cost money. It was also argued that greater competition from Mexican trucking firms would lower the price of road transportation within NAFTA. Given that two-‐thirds of cross-‐border trade within NAFTA goes by road, supporters argued that the savings could be significant. This provision was vigorously opposed by the Teamsters union in the United States, which represents truck drivers. The union argued that Mexican truck...
Words: 788 - Pages: 4
...2 3 5 - 2 4 5 e s t ey j o u r n a l . c o m The Estey Centre Journal of and Trade Po l i cy An Analysis of an Alliance: NAFTA Trucking and the US Insurance Industry 1 Bradly Condon Professor, Department of Business, Instituto Tecnologico Autonomo de Mexico I n t e rn ational L aw Tapen Sinha Seguros Comercial America Chair Professor, Department of Actuarial Studies, Instituto Tecnologico Autonomo de Mexico and Professor, School of Business, University of Nottingham In the NAFTA, the United States agreed to phase out restrictions on the operation of Mexican trucking companies in the United States. When the deadlines came, the Clinton Administration chose to maintain the restrictions. Following a NAFTA panel ruling against the United States, the Bush Administration announced it would remove the restrictions. The decision has met with opposition from both truckers and insurers in the United States, who cite safety concerns. This article examines the economic, political and legal forces at work in this debate, as well as the relationship between the NAFTA and WTO rules on trade in services that apply. Keywords: NAFTA; insurance; trucking; WTO Introduction y a 285–143 roll call, the U.S. House of Representatives voted on June 26, 2001, that it would block the Transportation Department from issuing permits that would let Mexican trucks operate throughout the United States. This vote is the result of opposition from both the Democrats and the Republicans. The...
Words: 5144 - Pages: 21
...NAFTA and Mexican Trucking In the 1994, as soon the North American Free Trade Agreement (NAFTA) went into effect, the treaty specified that trucks from each nation would be allowed to cross each other’s boarders to deliver goods. Before NAFTA Mexican trucks would have to stop at the border and unload their goods into American trucks, which was a very costly and timely process. A policy such as NAFTA was more efficient and also competition from Mexican trucking firms would lower the price of road transportation. Supporters argued that the savings of this policy could be significant. However, this provision was opposed by the Teamsters Union in the United States, which represents truck drivers. The union argued that Mexican truck drivers had poor safety records and that Mexican trucks did not adhere the safety and environmental standards of the United States. The Mexican government in March, 2009 increased tariffs on 89 products, with a value of $2.4 billion. Tariffs ranged from 10 to 45 percent and covered a variety of products that included paper, home appliances, vegetables, fruit, Christmas trees, suntan lotion, and other consumer goods. Among the states hit hardest by Mexico’s tariffs were California, Oregon, and Washington, which exported these products to Mexico. In March 2011, President Obama and President Felipe Calderon of Mexico unveiled a deal to resolve the dispute that kept Mexican trucks off American roads and resulted in billions of dollars in tariffs on U.S....
Words: 666 - Pages: 3
...Results: 1. What are the potential economic benefits of the trucking provisions in the NAFTA treaty? • Substantially decrease transportation costs between NAFTA countries. • The need for storage and warehousing was to decline. • The reduction in short-haul truckers would cut costs to shippers. • Economic efficiencies created by free trade in goods and services were meant to yield efficiencies in cross-border transportation of these products. Who benefits? • American companies • American and Mexican trucking industries • Consumers Who might lose? • Once implemented, these provisions help everyone involved on the American side. • Mexico’s economy has suffered and they have endured high level of pollution. 2. What do you think motivated the American Teamsters to object the trucking provisions of NAFTA? Are these objections fair? “Mexican trucks are older, dirtier and more dangerous than American trucks. American truck drivers are taken of the road it they commit a serious traffic violation in their truck. That’s not so in Mexico limits on the hours a driver can spend behind the wheel are ignored in Mexico”. – James Hoffa, the president of Teamsters. The Teamsters and other unions have officially opposed an open transportation policy on the grounds of trucks safety, although job preservation for their members appears to be an important part of their motivation. Why did the US Congress initially align itself with the Teamsters? • Pressure from America’s...
Words: 562 - Pages: 3
...NAFTA and Mexican Trucking Jacki DiSanto Cleveland State University NAFTA and Mexican Trucking Summary When the North American Free Trade Agreement (NAFTA) went into effect in 1994, the treaty stated that by 2000 trucks from each nation would be allowed to cross each other’s borders and deliver goods to their final destination. The treaty purposed was to improve efficiencies. Before NAFTA, Mexican trucks stopped at the border, and goods had to be unloaded and reloaded onto American trucks, this process took time and cost money. It was also argued that greater competition from Mexican trucking firms would lower the price of road transportation within NAFTA. Teamsters union in the United States, which represents truck drivers opposed the treaty. The union claimed that Mexican truck drivers had poor safety records and they do not follow safety and environmental standards of the United States. Also if they commit a serious traffic violation in their personal vehicle, the Mexican drivers are not taken off the road and limits on the hours a driver can spend behind the wheel are ignored in Mexico. The Teamster went as far as suing to stop the treaty. An American court rejected their arguments and stated the country must honor the treaty. As well as a NAFTA dispute settlement panel. This panel ruled in 2001 that the United States was violating the NAFTA treaty and gave Mexico the right to impose retaliatory tariffs. However Mexico, instead gave US a chance to honor the treaty...
Words: 1059 - Pages: 5
...potential economic benefits of the trucking provisions in the NAFTA treaty? Who benefits? The potential economic benefits are the greater economic efficiencies due to the free trade in goods and services that are meant to yield low cost of cross-border transportation which can eventually lower the storage and warehouse decline saving more money. Also reduction in unload-upload or short-haul truckers would save money and time. An indirect benefit would be the cost reduction duet to the competition in transportation companies. This is a mutual benefit agreement between USA and Mexico so the citizens of both the countries will benefit. 2. What do you think motivated the Teamsters to object to the trucking provisions in NAFTA? Are these objections fair? Why did Congress align itself with the Teamsters? Teamsters union opposed this in USA arguing: • Mexican truck drivers had poor safety record • Mexican trucks did not adhere to the strict safety and environmental standards of the United States • The trucks were older, dirtier and more dangerous than American trucks. • Drivers in Mexico are not taken off the road if they commit a serious traffic violation in their personal vehicles • Limits on the hours a driver can spend behind the wheel are ignored in Mexico. Objection regarding the Mexican trucks are not fair as the trucks were required to pass the 22 new safety standards set by the congress. This objection is also not fair because the Mexican trucks used for the pilot program...
Words: 265 - Pages: 2
...Mexican trucks to haul freight on U.S. roads The ambitious but controversial North American Free Trade Agreement[->0] between the United States[->1], Canada and Mexico from the 1990s is back, this time as the backdrop to a contentious new cross-border deal allowing Mexican freight trucks onto U.S. highways. The agreement, announced last month by theDepartment of Transportation[->2], is being assailed by critics as a possibly illegal undertaking that will take jobs from U.S. truckers and money from U.S. taxpayers. It is opposed by the USA[->3]'s largest transportation union, the Teamsters, by a national association of independent truckers and by some federal lawmakers from both parties. "We think it's unsafe, unfair and wrong for America," says Teamsters General President Jim Hoffa. "It's a danger to highway safety. …? It will cost thousands of trucking and warehouse jobs." He says the agreement is "probably illegal" because it goes beyond the scope of an earlier cross-border trucking pilot program that Congress killed in 2009. Critics such as Reps. Peter DeFazio[->4], D-Ore., andDuncan Hunter[->5], R-Calif., argue that Mexico's trucking industry is far less regulated and monitored than the USA's and that the deal opens the way for Mexican narco-traffickers to gain a foothold on U.S. roads. They're not convinced by assurances that Mexican trucks and drivers will be carefully inspected and monitored by U.S. authorities. "It takes $50 and a fake gold watch to get out of a speeding...
Words: 592 - Pages: 3
...There are many indicators that lead us to the conclusion that Mexico is a good potential market for U.S. Dairy products. Population is growing, which will lead to a larger market. The growth of Real GDP and GDP per capita will allow the buyer to buy more which will increase the consumption of Dairy products per head; the consumption of more expensive Dairy products will increase as well due to urbanization. The North American Free Trade Agreement (NAFTA) is one of the dominating factors of trade between U.S. and Mexico. Without having to pay tariffs, U.S. importers can afford to have prices for their products lower than other counties`. Infrastructure, communications and government regulations also tolerate U.S. import of Dairy products to Mexico. And last but not least, the existing gap between production and consumption of Dairy products in Mexico indicates the country`s urging need for imports. U.S. Dairy In 2010, U.S. exports of cheese, total whey products, lactose and other dairy products were valued at $3.71 billion, up 63 percent from the prior year. Export volume totaled 3.04 billion lbs. of U.S. milk solids, up 40 percent from 2009. Mexico ($823 million export value in 2010), Southeast Asia ($693 million, up 141 percent over 2009) and Canada ($436 million) remained the largest destinations for U.S. dairy products. In 2010, 12.8 percent of U.S. milk production (on a total-solids basis) was sold overseas. Dairy Products: 1) Cheese America is a nation of...
Words: 3151 - Pages: 13
...NAFTA is a short form of North America Free Trade Agreement. It’s an economic agreement between the United States, Canada and Mexico. NAFTA also beget one of the world’s biggest free trade areas by bringing together two of the world’s richest countries; United States and Canada and Mexico which is a less developed country. Its main aim was to lower the costs which are incurred during trading, also to make an increase of investments in the business and to assist the North America to be very competitive in market. NAFTA was also made to eliminate some of the barriers that are put in place to the manufacturing, to the agricultural and to the services (Buono, 2013). Also, was to remove various restrictions that are put in place in investment and...
Words: 1872 - Pages: 8
...could become a reality if the United States Chamber of Commerce ends their 16-year tomato agreement with Mexican growers. This agreement set a minimum price that Mexican tomatoes could enter the U.S. market. But Mexico warned the U.S. that they would retaliate. They declared that the Obama administration was just trying to calm the Florida growers because they are an important state in regards to his reelection. The Mexicans argument is that they are being attacked because they have a better product than Florida producers do. They invested a lot into new greenhouses, growing new types of tomatoes, and in complicated agricultural methods in order to increase the quality and productivity of their tomatoes. Mexico’s tomatoes are also vine-ripened, which is much better than the tomatoes grown in Florida. In Florida, they are picked while still green and gassed with ethylene in order for them to become red. Many commodity producers and stores, such as Walmart , are afraid that prices will need to be raised and other products would get caught up in the trade war. This would be quite disastrous and in the end, nobody would win. Since the 1996 agreement, Florida tomato sales dropped from $500 million to $250 million per year. That is half of their profit gone, which is why it is in the interests of the Florida tomato producers to have the agreement revoked. The price of Mexican tomatoes are so low that American tomato growers state that they can barely keep up with that sort of...
Words: 761 - Pages: 4
...Daniel James Kate Reed English Comp 10 December 2014 End Protectionism. Table of Contents Section 1: Introduction---------------------------------------------------------------------------------- 3 Section 2: What is Protectionism?-------------------------------------------------------------------- 3-9 Section 3: Why does it occur? ------------------------------------------------------------------------- 9-10 Section 4: Arguments For ------------------------------------------------------------------------------10-13 Section 5: Conclusion------------------------------------------------------------------------------------13-15 Works Cited-----------------------------------------------------------------------------------------------16 Section 1: Introduction The United States should institute a blanket reform of its international trade policies. Its current protectionist practices are both in violation of current World Trade Organization suggestions and mandates and, far from being beneficial to the American economy, for the most part serve to hurt both American and foreign consumers. There are few American markets not protected in some way by the Federal Government in the form of tariffs, quotas, or domestic subsidies. While these practices are touted as an aid to domestic manufacturing process, true economic analysis shows that most if not all protectionist measures actually serve to limit economic growth. The arguments given to justify protectionism range from...
Words: 3525 - Pages: 15
...Walmart’s Global Strategies Jennifer D. Wright National American University: Management Across Cultures 1 March 2015 Abstract Walmart is one of the world’s largest and most well-known retailers in the world today. It has achieved great success in areas like Mexico and Canada; however it has also seen failures in other areas like Germany and Hong Kong. This paper will discuss a brief history of Walmart’s global expansions and the strategies it chose to enter these markets. It will answer the following specific questions: When did Walmart enter the global expansion? What international markets did Walmart enter? What cultural challenges has Walmart faced? How did Walmart overcome these challenges? Where future expansions and opportunities are possible? To answer these questions, this paper will have four basic sections: A brief history of Walmart’s global expansion, what was their strategy with each expansion, cultural differences they faced, and where is Walmart going in the future. This paper will attempt to examine the strategies of its global expansion and how it used the challenges to continue success in future expansions. Walmart is the most well-known and largest retailer in the world today; with sales worth more than $200 billion, $35 billion of that from Walmart’s International Division. The company grew incredibly fast both in the United States and abroad. By tweaking entry modes, and studying the cultural differences and local threats...
Words: 2945 - Pages: 12
...Kansas City Southern Analysis Report Prepared for Vice President of Acquisitions Prepared by October 27, 2015 October 27, 2015 Kansas City Southern Analysis Report Prepared for Vice President of Acquisitions Prepared by October 27, 2015 October 27, 2015 To: From: Subject: Kansas City Southern Analysis Report Date: 10/27/2015 Kansas City Southern Introduction Kansas City Southern, founded in 1887, is a railway transportation company that covers the southern part of the US, Mexico, and Panama. It serves both commercial and industrial sectors (Kansas City Southern, 2014). The following report will cover the company’s growth potential, the competitive ratio analysis, the competitive edge it has over the other companies and the key aspects of the industry and how KCS fits in. The summary of the overall position of the company helps in guiding the purchasing decision. Ratio Analysis Looking at key ratios between Kansas City Southern and the rail industry, you will notice some positive and negatives points of interest between the two. The first key figure you will notice is the annual sales is significantly lower than the industry at 2.58B vs. an industry average of 10.5B. This is expected though because KCS is one of the smallest companies in the industry. Looking at profit margins, KCS does not perform up to the industry averages with gross profit margin, net profit margin, as well as pretax profit margin. The reason for this...
Words: 2589 - Pages: 11
