The Open Road for Mexico’s Flowers?

December 31, 2001 - 14:01

Safety concerns are keeping cross-border trucking in a state of limbo as the United States and Mexico navigate the curves in this political battle. The real question is, will opening U.S. highways to Mexican trucks affect the U.S. floriculture industry?

How many trucks does it take to deliver a rose? If that rose
is from Mexico, it could take quite a few.

Mexican carriers, of flowers, fruit and any other cargo
coming into the States, were scheduled to have full access to U.S. highways as
of January 2000 under terms of the North American Free Trade Agreement
(NAFTA). 

However, Mexican trucks are still currently confined to
border zones in which freight must be transferred to U.S. haulers for stateside
delivery.

Under existing provisions, Mexican trucks are allowed to
bring goods just 20 miles into the United States. Material is then transferred
to a U.S. carrier to reach its final destination.

“We currently get floral product from Mexico,”
said Bob Echter of Dramm and Echter, a cut flower grower in Encinitas, Calif.
“And the system in place now seems to be working just fine for us. I
don’t know how NAFTA compliance would immediately affect our business.
But I’m guessing it would impact floral transportation, which would
ultimately mean change for the floriculture industry.”

Echter sums up the feeling of many growers — they are
aware of the issue, but aren’t quite sure how it will affect their
business.

Even industry groups like the Society of American Florists
(SAF) and the American Nursery and Landscape Association (ANLA) don’t
have a clear position statement on the issue.

“We’re definitely keeping tabs on what is
happening,” said Drew Gruenburg, senior vice president of SAF.
“Growers we represent could very well be affected by a change from the
current status of trade with Mexico, but we’re just not sure yet. It
hasn’t really bubbled to the surface.”

A Little History

Despite the trucking provisions originally outlined in
NAFTA, President Bill Clinton instituted a moratorium in 1995 prohibiting
Mexican truckers from traveling more than 20 miles into U.S. territory. But in
February 2001, a NAFTA arbitration panel ruled that the United States must end
its current moratorium on considering Mexican applications for cross-border
trucking privileges.

The NAFTA panel ruled that the United States is violating
the trade pact and could be forced to pay compensation to Mexico in the form of
higher tariffs on goods or services going south of the border. Or, the United
States could simply be fined for its violation of the agreement, a lump sum
estimated at $2 billion a year.

The possibly hefty fines haven’t swayed the House of
Representatives, which recently voted against opening the domestic market to
Mexican truckers because of safety concerns. As U.S. Rep. David Obey of
Wisconsin put it, “NAFTA is a trade pact. It is not a suicide
pact.”

The Heart of the Issue

With relatively low-cost cut flowers coming from Mexico, why the heated opposition to opening the border-and-beyond to Mexican truckers? The number one reason: safety.

“I can’t really say if opening the border to
Mexican trucking would hurt our business,” said John Yamashiro, president
of Wilsey-Bennett, one of the leading floral trucking firms in the United
States. “The real concern is security. As a U.S. company, we are forced
to comply with stringent safety standards. It is a constant question as to
whether Mexican trucks could meet those same standards.”

According to studies conducted by the U.S. Department of
Transportation’s (DOT) 
Inspector General and the U.S. General Accounting Office, far too many
safety hazards exist with cross-border transportation from Mexico, and the
United States is ill-prepared to handle the massive influx of foreign traffic
that would result from opening the border.

The DOT further reported that Mexico currently does not have
in place:

             governing
regulations and practices regarding hours of service;

             a
drug and alcohol testing program;

             a
program to conduct roadside safety inspections of commercial vehicles;

             a
carrier/driver database with economic and vehicle licensing information;

• a driver’s licensing module with driver
licensing data; and

• a safety module with accident, infraction and
inspection data.

U.S. union leaders also contend that “whatever
sanctions the United States may face as a result (of violating NAFTA) will be a
small cost to protect American lives on our highways.”

U.S. growers and industry groups are understandably
apprehensive with the safety record of Mexican commercial carriers, and many
fear increased floral prices as a result of uninsured carriers or increases in
the number of accidents on U.S. highways. 

“Clearly, the safety concerns should be addressed in a
holistic way,” said Craig Regelbrugge, senior director of government
relations for the ANLA. “The important thing is to ensure that U.S.
growers, nurserymen and floral transporters do not suffer any kind of backlash
because of lowered standards for Mexican carriers.”

Mexican Potential

Mexican commercial flower production is a relatively new
economic activity for the country that has grown explosively over the past few
years. Flowers are now one of Mexico’s largest exports into the United
States. Mexico produces flowers on more than 12,000 acres of mostly open
fields, and after The Netherlands, has the world’s second-highest yield
in millions of stems per acre.

The United States imported more than $25 million in flowers
from Mexico last year, which accounted for more than 90 percent of
Mexico’s flower exports. Roses and carnations make up the bulk of exports,
although modest amounts of anthurium, dendrobium and other orchid types are
also exported. With its suitable climate and geography, and a large and
low-cost labor force, Mexico is only beginning to realize its potential as a
flower exporter.

However, Mexican floriculture is not yet in direct
competition with U.S. floriculture.

“Because of the stringent phytosanitary and quarantine
laws currently in place, much of Mexico’s floral product is restricted
from moving into the United States because of the potential of importing pests
in the soil,” said Regelbrugge.

Although Mexico does not compete in the bedding plant arena,
the potential for cut flower competition does exist. As Mexico’s fields
are Á planted with more flowers and less corn, more than just roses and
carnations may begin making their way across the border.

The Other Side of the Story

“We fully support the trucking provisions of
NAFTA,” said Mike Russell, a spokesman for the American Trucking
Associations. “The only thing we do insist on is that the trucks and
drivers coming into the United States meet the U.S. safety standards. Mexican
trucks will have to meet U.S. standards to operate in this country. It is as
simple as that.”

According to Mexico’s Office of the Undersecretary for
International Trade Negotiations, the safety of Mexican trucks is actually
improving. More than half of Mexican trucks failed inspection six years ago. In
2000, only one in three didn’t make the grade. Many analysts believe that
the failure rate of Mexican trucks will shortly fall to one in four.

Mexico is also in the process of developing more stringent
safety and inspection standards, as well as regulations on truck size and
weight, emissions, and drug and alcohol testing — although no time frame
for implementing these changes has been communicated to the United States.

Mexican officials also point out that skewed statistics and
fears are focused on short-haul Mexican trucks, which is the wrong place to
look. Currently, Mexican long-haul trucks bring goods to the Mexican border
depot.

Goods are then transferred to a Mexican short-haul truck
(since Mexican trucks are only allowed to travel 20 miles into the States).
Goods are again transferred once inside the United States onto U.S. long-haul
trucks. And that’s the best-case scenario. Depending on the companies
involved, flowers and other goods crossing the border may make up to five
transfers to reach their destination.

If Mexican trucks were allowed to travel inside the United
States, Mexican trucking companies would utilize long-haul trucks, which are
considered to be newer and more road-worthy.

The Road Goes Both Ways

What many in this debate fail to realize is that if U.S.
roads are opened to Mexican trucks, the opposite also becomes true for U.S.
trucks. Under current law, U.S. trucks are restricted from full access to
Mexican highways. U.S. trucking companies stand to gain substantially from full
access to Mexican highways. In fact, some Mexican trucking companies oppose
lifting the restriction for fear that U.S. trucking will end up dominating the
Mexican long-haul business.

“If the NAFTA trucking provisions are implemented, I
don’t think our economy or trucking competition will suffer,” said Russell.
“Most Mexican carriers don’t have the size or financial
capabilities to fully operate in the United States. If anything, U.S. carriers
and exporters will benefit. We have more than 2.5 million trucks in America.
Mexico has 200,000 trucks. Other than a few instances, most Mexican carriers
will not haul in the United States.”

The Long Road for Roses

Cross-border trucking may turn out to have a positive impact
on U.S. growers and floral transporters. Unloading and reloading every truck at
the border raises retail prices of Mexican-imported flowers and creates
paralyzing congestion at border crossings. Implementing NAFTA may mean lower
prices on Mexican flowers and more reliable delivery in the just-in-time flower
chain.

On the other hand, safety is still a concern. Although
Mexican officials have promised to meet U.S. standards, many American growers
and floral trucking companies “will believe it when they see it.”

As the debate over cross-border trucking continues to
unfold, the best growers can do is to remain alert and active.

“The key right now with this issue is to remain aware
of what’s going on. If we keep this on the radar screen, we’ll be
able to deal with any potential effects as they happen,” said Gruenberg.

About The Author

Beth Meneghini is a freelance garden writer based in San Diego. She can be reached via email at beth4437@hotmail.com.

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