BANFF, Alta. – In the face of increasing trade between Canada and Mexico, Rogelio F. Montemayor-Morineau, president of Canacar, Mexico’s trucking association, said he would take a wait and see approach to the future of the North American Free Trade Agreement (NAFTA).
“What is going to happen in the future, I really don’t know,” Montemayor-Morineau said of the uncertainty surrounding NAFTA with the new Trump administration reviewing the agreement. “But I hope it’s good for our three countries.”
Montemayor-Morineau said changes to NAFTA could make wait times at the US-Mexico border longer than they already are, and could also have an effect on the price of goods and even the amount of product that crosses the borders separating Canada, the US and Mexico.
“We don’t know what to do or what to expect, so we will wait,” admitted Montemayor-Morineau, who was speaking to attendees at the Alberta Motor Transport Association (AMTA) Leadership Conference in Banff, Alta., April 29. “(NAFTA) has been good to us, and it has been good to our economy.”
Montemayor-Morineau provided an overview of Mexico’s trade situation with both the US and Canada, and said since NAFTA was implemented in 1994, despite his country’s hesitations at first, has been good for Mexico, with numbers to prove it.
Total commerce between Canada and Mexico has continued to rise, with $12.5 billion in 2006 and that number jumping to over $20 billion in 2016, a slight drop from a high in 2012 at $20.8 billion.
Trade between Canada and Mexico has increased an average of 11% each year, with Canada also ranking seventh in terms of foreign direct investment in Mexico.
Mexican trade with the US totaled $482 billion in 2016, with a high of $513.6 billion in 2014.
Mexico boasts 49 ports of entry, five of which are considered to be primary entry points with the US – Tijuana, Ciudad Juarez, Colombia, Nuevo Laredo and Ciudad Reynosa. Nuevo Laredo accounts for 34.25% (2.33 million) commercial vehicle crossings and Tijuana 16.2%.
There are a total of 19 ports of entry at the US-Mexico border.
But wait times at those points of entry are lengthy for truck drivers, amounting to a five to six hour process.
And once Mexican drivers enter the US, they must then drop their cargo within a 20-km distance from the border, which is then picked up by an American carrier who completes the transport of the goods to its final destination in the US or Canada, a process Montemayor-Morineau said has created issues for many trucking companies in Mexico.
Montemayor-Morineau said approximately 80% of goods in Mexico are moved by truck, with the remaining transported by rail, and that like Canada and US, a driver shortage has impacted the industry.
Vehicle production is vital to the Mexican economy, as it is the seventh largest producer in the world and sixth largest for heavy vehicles with growth expected to continue. Freightliner, Daimler, Cummins, Kenworth and Hino, among other trucking companies, all have factories in Mexico.
“When it comes to NAFTA and they say they are going to increase the taxes on automotive, that’s one of the reasons,” Montemayor-Morineau said of the number of vehicles produced and exported from the country. Over 8% of Mexico’s exports are automotive, 5.7% are automotive accessories and 5.4% are transport trucks.
Despite the automotive industry’s success in Mexico, Montemayor-Morineau said the southern region continues to struggle when it comes to industry, something the government is making efforts to change, with the vast majority of industrial activity in the north and central regions.
Progress on making Mexican truck fleets more environmentally-friendly has also been lethargic at best, with the availability of low-sulfur diesel and diesel exhaust fluid (DEF) non-existent, making compliance with recent Environmental Protection Agency (EPA) regulations next to impossible; the country currently adheres to the EPA’s 2004 standards.
Montemayor-Morineau said 2018 could be the year when low-sulfur diesel is readily available in Mexico.
Fleets are also aging rapidly, with the average age being 17 years, which makes greenhouse gas goals difficult to achieve, as well as new technologies like electronic logging devices, which Montemayor-Morineau said is years away in Mexico.
Rest stops for drivers are another contentious issue, with a lack of land, money and investment resulting in an absence of the much needed infrastructure. And though Montemayor-Morineau said security in Mexico is getting better, it would still be a matter that would have to be dealt with should any rest areas be developed.
Montemayor-Morineau term as president of Canacar runs from 2015-18.
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