Border Disputes, Culture
Wars and Supply Chain Security
By
Erin Thomasson, Senior Vice President - Risk
Management & Insurance, Expeditors International
Ensuring
the security of your supply chain can be an exercise in complexity, requiring a
solid grasp of international law, regional politics, national legislation and
even cultural attitudes.
Take
the recent controversy surrounding the decision by the U.S. Congress on whether
to continue to fund the “Cross Border Demonstration Program,” a pilot program
that allowed both
Enacted
under the Bush administration, the pilot program sought to address unfulfilled
Beginning
in 2007, the program “was designed to simplify a process that currently
requires Mexican truckers to stop and wait for U.S. trucks to arrive and
transfer cargo,” according to then U.S. Transportation Secretary Mary Peters,
who went on to describe the existing process—which prohibited Mexican truckers
from travelling beyond a 25-mile buffer zone along the Southwest border of the
United States—as one that “wastes money, drives up the cost of goods, and leaves
trucks loaded with cargo idling inside the U.S. borders.”
Citing
differing safety standards between the two countries, under the terms of the
pilot program, Mexican truckers who wanted access had to undergo a rigorous
inspection of their vehicles to ensure their safe operation, and required
Mexican truck drivers to hold a valid commercial drivers license, carry proof
they are medically fit, comply with all U.S. hours-of-service rules and be able
to understand questions and directions in English.
But
in March 2009, Congress voted to defund the program, effectively shutting it
down.
Proponents
of the decision, such as the U.S. Teamsters Union, applaud the cancellation,
arguing that the programs endanger American drivers and eliminate American
jobs.
Critics,
including Frank Vargo, vice president for
international economic affairs at the National Association of Manufacturers,
say the move will hurt trade for
Politics, Supply Chain,
and the Bottom Line
In
response to Congress’ cancellation, the Mexican government recently announced
it was considering raising tariffs on 90
“Because
Congress has terminated the pilot program in violation of our NAFTA
obligations, Mexico has announced that it will retaliate against us, as it is
entitled to do, by increasing duties on $2.4 billion of U.S. exports of key
commodities like wheat, beans, beef, and rice," Representative Kevin
Brady, a Texas Republican, said in statement.
But
it’s exactly this kind of uncertainty that a good supply chain risk management
system is designed to address, according to Erin Thomoson,
senior vice president, Risk Management, Expediters International.
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