Trucking Update. (New Business).

The possibility of a long, drawn out trade war reared its ugly head on June 26, when the U.S Congress rejected funding for safety verification of Mexican trucks entering U.S. territory-a move that virtually blocks U.S. President George Bush's plans to open the market by January, 2002.

"The president thinks that the decision was a mistake and hopes to continue working with members of Congress to reverse the decision, as it would create a problem with Mexico," White House spokesman An Fleischer told press.

Economy Secretary Luis Ernesto Derbez warned that if the U.S. Congress succeeds in impeding the entry of Mexican trucks, Mexico will respond by limiting the imports of U.S. products, such as the 500,000 tons of high-fructose corn syrup brought in each year.

The official position of the U.S. Department of Trade to allow Mexican trucks access to the United States-and thereby comply with a February, 2001 Nafta dispute-settlement panel ruling-has caused tensions to flare on both sides of the border.

U.S. interest groups such as the International Brotherhood of Teamsters have claimed that Mexican trucks are just too unsafe for U.S. highways.

"Nafta has cost us American jobs," Teamster leader James Hoffa has said, "It must not cost us American lives."

However, others have claimed these safety concerns are overblown.

"Under Nafta, every truck entering the United States is required to meet each and every U.S. safety requirement," Thomas Donohue, President of the U.S. Chamber of Commerce told the House Committee on Transportation and Infrastructure on July 18. "In fact, Mexican motor carriers applying for U.S. permits will be required to provide far more detailed information regarding their ability to meet U.S. safety requirements than their American or Canadian counterparts."

Donohue added that the safety issue can be easily addressed by the United States under Nafta rules while at the same time keeping its international obligations.

Mexican truckers, meanwhile, are worried about their ability to compete domestically if U.S. trucks were allowed access to Mexico. The National Cargo Transport Chamber (Canacar) has lobbied the Fox administration and Congress to close the border to U.S. trucking companies.