Eliminating the ban on Mexican trucks crossing the US border

A Wall Street Journal article (March 4, 2011) describes the announcement of the end of the 20 year ban  on Mexican truckers driving across the US border (the ban was a violation of the Nafta agreement). That ban has resulted in Mexico imposing punitive tariffs on pork, sun tan lotion, vegetables, construction equipment etc being imported into Mexico from the US, thus hurting those industries. The US government claims that US products will now  be more competitive in Mexico and thus expand business opportunities. Mexican trucks would be required to carry electronic recorders to ensure that they only did cross border traffic and not domestic (within US) carriage.  Clearly this will also decrease transport costs and delivery lead times for cross border flows.  Will the lower lead times and transport costs increase manufacturing in Mexico to serve the US market or increase sales of US produced goods in Mexico ? Will the lower margins on cross border traffic increase domestic US transport costs as trucking companies try to cover their overall costs ? Will this closer integration move manufacturing from China back into the Nafta region ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , . Bookmark the permalink.

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