Segment 1 Of 2     Next Hearing Segment(2)

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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at []. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.







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AUGUST 9, 1996 (PHARR, TX)

Printed for the use of the

Committee on Transportation and Infrastructure


BUD SHUSTER, Pennsylvania, Chairman

WILLIAM F. CLINGER, Jr., Pennsylvania
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THOMAS E. PETRI, Wisconsin
HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
WILLIAM H. ZELIFF, Jr., New Hampshire
BILL BAKER, California
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
PETER I. BLUTE, Massachusetts
JOHN L. MICA, Florida
ZACH WAMP, Tennessee
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RANDY TATE, Washington
RAY LaHOOD, Illinois

NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
ROBERT E. WISE, Jr., West Virginia
BOB CLEMENT, Tennessee
ELEANOR HOLMES NORTON, District of Columbia
PAT DANNER, Missouri
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JAMES E. CLYBURN, South Carolina
BOB FILNER, California
FRANK MASCARA, Pennsylvania
GENE TAYLOR, Mississippi

Subcommittee on Surface Transportation

THOMAS E. PETRI, Wisconsin, Chairman

RAY LaHOOD, Illinois
WILLIAM H. ZELIFF, Jr., New Hampshire
BILL BAKER, California
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
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PETER BLUTE, Massachusetts
JOHN L. MICA, Florida
RANDY TATE, Washington
BUD SHUSTER, Pennsylvania
(Ex Officio)

NICK J. RAHALL II, West Virginia
ROBERT E. (BUD) CRAMER, Jr., Alabama
PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
BOB FILNER, California
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FRANK MASCARA, Pennsylvania
ROBERT A. BORSKI, Pennsylvania
(Ex Officio)


Proceedings of:

August 8, 1996

August 9, 1996


August 8, 1996

  Casanova, José Maria, President, Union de Operadores del Autotransporte de Sonora A.C

  Campos, Alfredo Montes, Director, Municipal de Desarrollo Economico, Nuevo Laredo, Tamaulipas, Mexico
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  Donohue, Thomas J., President and CEO, American Trucking Associations, Inc

  Huber, June V., Assistant Commissioner for Portfolio Management, Public Buildings Service, U.S. General Services Administration

  Laney, David M., Commissioner of Transportation, Texas Department of Transportation

  Martinez, Hon. Mercurio, Jr., County Judge, Webb County, Laredo, TX and Vice Chairman, The North America's Superhighway Coalition

  Michie, Donald A., Ph.D., Chairman, Transportation Committee of the Border Trade Alliance, El Paso Foreign Trade Association

  O'Connell, K. Michael, Counsel, Owner-Operator Independent Drivers Association, Inc., accompanied by Charles Holman, Owner-Operator Independent Drivers Association, Inc., Member of the Board of Directors for the State of Texas

  Prestridge, Jerry, Executive Director, Texas Bus Association, Inc. (TBA)

  Ramirez, Hon. Saul N., Jr., Mayor, City of Laredo, Texas

  Riojas, John, International Vice President, International Brotherhood of Teamsters

  Simpson, John P., Deputy Assistant Secretary for Regulatory Tariff and Trade Enforcement, U.S. Department of the Treasury
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  Slater, Rodney E., Administrator, Federal Highway Administration, U.S. Department of Transportation accompanied by George L. Reagle, Associate Administrator for Motor Carriers

  Thomas, Col. Dudley, Assistant Director, Texas Department of Public Safety


  Casanova, José Maria
  Campos, Alfredo Montes

  Donohue, Thomas J

  Huber, June V
  Laney, David M

  Martinez, Hon. Mercurio, Jr

  Michie, Donald A

  O'Connell, K. Michael

  Prestridge, Jerry

  Ramirez, Hon. Saul N., Jr
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  Riojas, John

  Simpson, John P

  Slater, Rodney E


Donahue, Thomas J., President and CEO, American Trucking Association, Inc:

Letter from Francisco J. Davila Rodriguez, Senador de la Republica of Mexico, July 5, 1996

Letter to Charles A Bowsher, Comptroller General, U.S. General Accounting Office, March 19, 1996

Martinez, Hon. Mercurio, Jr., County Judge, Webb County, Laredo, TX and Vice Chairman, The North America's Superhighway Coalition:


Report, U.S. Exports to Mexico: A State-by-State Overview, 1987-1990 NAFTA & The Port of Laredo in the Year 2000, by Frank E. Leach, CED: Laredo Development Foundation

North America's Superhighway Coalition Mission Statement, Committee Structure, Coalition Overview, report
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Laredo Morning Times, August 6, 1996*

Report, NAFTA Trade: Past, Present and Future, a 50-State Analysis and Forecast of U.S. Exports to Mexico, 1987—2000, Dean International, Inc., Public Policy Advisors and Consultants, 1996*

Michie, Donald A., Ph.D., Chairman, Transportation Committee of the Border Trade Alliance, El Paso Foreign Trade Association

US-Mexico Cross Border System General Model, chart

US-Mexico Regulation of Cross Border Transportation, Federal/Border State Comparisons Key Provisions, chart

Southwest Border Infrastructure Initiative Final Report, Border Trade Alliance

Riojas, John, International Vice President, International Brotherhood of Teamsters:

Summary of Southwest Border Crossing Inspection Activities, December 18, 1995—April 5, 1996

Report, Commercial Trucking: Safety and Infrastructure Issues Under the North American Free Trade Agreement, U.S. General Accounting Office, February 1996

Report, Commodity Flow Study, City of Laredo, Texas, August 8, 1995

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Giermanski, Dr. James R., Director, Transportation and Logistics, Texas A&M International University, report, ''Crossing Problems at the Border: The Result of Self-Interest''

  Leach, Frank E., C.E.D., Executive Director, Laredo Development Foundation, report, Laredo '96: Still Bordering the Future, charts on Laredo 1991—1995

  Morales, Dan, Attorney General, State of Texas, statement

  Pickle, Hon. Jake, Former Member of Congress, on behalf of Austin-San Antonio Corridor Council, statement

  Sprague, Stephen G., Vice President, Government Affairs, United Motorcoach Association, statement and attachments

  California Trucking Association, statement

AUGUST 9, 1996

  Archer, Allyn, President, Texas Good Roads/Transportation Association

  Borchard, Hon. Richard, Judge, Nueces County, Texas

  Burnett, William G., Executive Director, Texas Department of Transportation
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  Card, Hon. Bill, Mayor, Harlingen, TX

  Perez, Hon. Ricardo A., Mayor, Mission, TX

  Summers, Bill, President, Rio Grande Valley Partnership, on behalf of the I—69 Mid-Continent Highway Coalition


  Archer, Allyn

  Borchard, Hon. Richard

  Burnett, William G

  Card, Hon. Bill

  Perez, Hon. Ricardo A

  Summers, Bill

  Gonzalez, Mayor, City of Brownsville, Texas, statement

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  Ortiz, Hon. Solomon P., a Representative in Congress from Texas, statement

  Santos, Emilio D., President, Import-Export Produce Association, letter, August 9, 1996

  National Association of Independent Insurers, statement



House of Representatives,

Subcommittee on Surface Transportation,

Committee on Transportation and Infrastructure,

Laredo, TX.

  The Subcommittee met, pursuant to call, at 9:07 a.m., in Seminary Room BH—101, Texas A&M International University, 5201 University Boulevard, Laredo, Texas, Hon. Tom Petri (chairman of the subcommittee) presiding.

  Mr. JENNETT. Good morning. I am Charles Jennett. I am President of Texas A&M International University and I have been here a whole week--I am the new President. We want to welcome you to the campus. We hope your meeting is a successful one.
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  You do not know it, but I am a civil engineer, I made my living in this business, in transportation and environmental engineering, and I know how important it is to all of us in this room. We have two countries and one economy and we need to link them together with all kinds of transportation. And we are glad to have you here on campus so that you can carry on your conversations.

  I said I would keep this short, but I wish to welcome you here. If there is anything we can do to make your stay more successful, please let us know. We hope you have a good time and a productive time, and welcome to Laredo. Thank you.

  Mr. PETRI. Thank you very much, President Jennett. We appreciate you making these facilities available.


  Mr. PETRI. The Subcommittee on Surface Transportation is meeting today to discuss issues relating to border infrastructure, motor carrier safety and the impact of NAFTA on these two concerns.

  It is clear that adequate infrastructure to support international trade, which is the economic lifeblood of our country, and particularly border regions, is an issue of vital national importance. It is impossible to have an efficient trade network without the necessary border facilities and road infrastructure needed to ensure the smooth flow of commerce between the United States and Mexico. The promise of increased trade with Mexico as a result of NAFTA has only heightened the pressures this Subcommittee and the Congress in general have faced regarding border infrastructure.
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  Although NAFTA has not yet been fully implemented, we already have seen a significant increase in commercial traffic at the border. Currently, roughly 11,000 truck crossings each day from Mexico into the United States occur along our 2000 mile border with close to half of those crossings occurring right here in Laredo. Certainly it is not efficient or desirable to have trucks lined up for miles with drivers waiting hours, if not days, to cross the border.

  But with the promises of NAFTA also come challenges and all has not proceeded on schedule. Many difficult issues remain unresolved and have caused uncertainty in many areas.

  On December 18 of last year, citing concerns about safety and security, Transportation Secretary Pená delayed the opening of border states to foreign operators, and so foreign vehicles are still allowed to operate only in the commercial zones. This announcement on the very day that access was to be achieved was applauded by some and criticized by others. The delay remains in effect today and we do not know when that may change.

  The issue of ensuring motor carrier safety is perhaps the most sensitive one we face and I know it has generated strong feelings for many parties and in the border communities today. There is no doubt this is a difficult issue. The purpose of this particular hearing is not to lay blame or to point fingers. Rather, we are here for what we hope will be an honest discussion of all border issues and to seek recommendations and possible solutions on ways to alleviate border congestion and to ensure that international trade can continue to flourish and flourish in a safe and efficient environment.

  This morning we will hear from a broad cross section of witnesses representing Federal, State and local interests, the business community and others who have a stake in trade issues. This illustrates that we must have a coordinated, coherent effort by all levels of government and by the private sector in order to meet the challenges before us.
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  Before we begin, I want to acknowledge the presence and recognize officials from Mexico who have joined us for this hearing as observers and who are seated in the front row of the auditorium, including Greg Canales, who is representing Governor Clariond from the state of Nuevo Leon; Raul Cardeenas Heraldez, the Mexican Consul from the City of Laredo and José Trevino of the Mexican Embassy in Washington, D.C. José has been introducing us to the culture on both sides of the border.


  Mr. PETRI. Mr. Morales, the Attorney General of the State of Texas, had hoped to be here and cannot be. Any statement that he might have will be made a part of the record.

  I would like to particularly acknowledge and thank the hard-working, Rodney Slater, who is here, and we will be hearing very shortly from the Federal Highway Administrator for the United States of America.

  We are especially happy to be joined by Henry Bonilla, who is in many ways responsible for our being here today. And I would like to ask him and other members of the panel if they have any comments.

  Mr. BONILLA. Mr. Chairman, I would just like to say that I think this visit by this Congressional delegation has, even before the beginning of this hearing, already been a success because we had a chance yesterday to show all of the members of this Subcommittee firsthand what happens on the bridges, what happens as trucks are crossing our border northbound and how they go through the process right under the bridge. And it has made a big impression.
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  A lot of us who know and live in or near the area are already aware and awed by the amount of traffic that comes across the border every day. And quite frankly, I think I could speak for some of my fellow colleagues here today and say that they were overwhelmed at the amount of work that Customs does, that the INS does and the managers of the bridge do, to process the incredible number of trucks coming across the border every day.

  I would like to thank the city of Laredo and Mayor Ramirez for the wonderful hospitality that they have shown the Subcommittee. They certainly are going to remember this trip for a long time. I would also like to extend thanks to Pepe Trevino, for being a big part of our day here so far.

  And with that, I yield back, Chairman, and appreciate the opportunity to make an opening comment.

  Mr. PETRI. Thank you very much, Henry.

  I would now like to yield to the ranking Democrat on our Surface Transportation Subcommittee, Congressman Nick Rahall from West Virginia.

  Mr. RAHALL. Thank you, Mr. Chairman.

  I associate myself with your opening remarks. I do not have a prepared statement. I want to also thank Representative Henry Bonilla for his very gracious hospitality, as well as our colleagues from Texas, Representative Eddie Bernice Johnson and Pete Geren, who have been with us on the tour thus far as well.
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  Yesterday was a very interesting day, to have a tour of the bridges, to see the safety concerns, to see the processing that actually goes on was quite remarkable. You can read about it, you can hear about it in Washington, but to be here and see it firsthand has an everlasting effect., And that has been the purpose of our trip, is to see firsthand these problems. And today, we are going to hear from you.

  So I appreciate very much this opportunity to hear from our distinguished panelists today and at this point would yield to Representative Johnson for any comments she wishes to make.

  Ms. JOHNSON. Thank you, Mr. Rahall. And Mr. Chairman and other members of the Committee, as a Texan from the Committee, let me just welcome you to Texas to our very distinctive culture that we foster and respect in Texas, and I want to thank the persons who have been a part of the great hospitality here and especially the food. It is so nice to be home to have Mexican food. We do not get it as well in Washington, and it makes you homesick for it. And thanks to all the witnesses who have come for us today. And yesterday was very, very interesting and I am delighted that the Committee was influenced by Mr. Bonilla to come here. I tried to get them to come to Dallas, but obviously he had more influence.


  Mr. RAHALL. Mr. Chairman, we are also joined on our side by Representative Bob Borski, who is the ranking Democrat of our Water Resources Subcommittee, from Pennsylvania.

  Mr. BORSKI. Thank you, Mr. Chairman.
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  I note that we have a long and distinguished group of people ready to testify, so at this point I would be happy to again thank Congressman Bonilla for his hospitality and look forward to hearing from our witnesses.

  Mr. RAHALL. And of course, I have already mentioned him, but Representative Pete Geren, another very distinguished member of our Committee on Transportation is here.

  Mr. GEREN. Thank you very much.

  I just want to join my colleagues in thanking the City of Laredo for the warm hospitality and I want you to know that we have experienced great hospitality on both sides of the river until the wee hours of the morning last night. I feel like we have made the most of every minute since we have been here. But the hospitality really has been wonderful and we thank you. And Henry, we thank you for bringing us down here and helping us to understand these very important issues.

  We are on the dawn of a new era with NAFTA. I do not think any of us can imagine what NAFTA is going to do to the whole country, certainly this part of the state of Texas over the next 10—20 years. The planning has to take place now or it is going to catch us unprepared. And Mr. Chairman, I commend you for making this a priority and I know Congressman Bonilla has helped all of us in Congress understand the importance of this issue, but we welcome you to Texas and thank you for your attention to this matter.

  Mr. PETRI. Thank you.
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  We will begin the hearing. I might just mention that this strange creature called a Congressional hearing. Sometimes people wonder exactly what it is all about and like a lot of things, if you watch television, you get a somewhat skewed vision that it is an inquisition or something of that sort. What is televised is one part of the hearing process, which is generally Congressional oversight of the Executive Branch. At such hearings people are asked to account for their deeds or misdeeds in a public forum as a way of venting, reviewing and discharging the elected representatives' responsibility for oversight over the expenditure of public funds and the execution of the oath of office of different Federal officials.

  But this is a bread and butter hearing and the real purpose is to give people a chance to express their particular individual or organization's point of view and to hear what other people have to say, so that hopefully through this airing process and this process of mutual discussion, we can--end up with better public policy. That is what we are going to do today.

  The bell went off and so I will stop, but I will say we have a very rich, long hearing today. We tried to give everyone the chance within the constraints of a tight schedule to have equal opportunity to say something and to respond to questions. Longer statements or materials that they want to submit will be made a part of the record of the hearing. What that really means is that everyone who testifies or is interested in the subject has a chance to review their statements and positions and use that information to help them formulate their own responses or ideas.

  We are hoping that this process over time will help us make progress along the border. If our colleagues in the Mexican legislature may want to have similar hearings or invite us at some point in the future, we would welcome that.
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  The first panel consists of the Honorable Saul Ramirez, our host, Mayor of Laredo, and Licencia Montes, Mayor of Nuevo Laredo. We would like to welcome you both and thank you for your hospitality.


  Mr. RAMIREZ. Thank you very much, Mr. Chairman. Saul Ramirez, Mayor of the City of Laredo, for the record. I have prepared a statement for the record, which has been submitted for the record and I will make comments and a summary of my statement.

  First and foremost, let me welcome you and give you a warm bienvenida to the City of Laredo.

  I would like to thank the members of the House of Representatives Subcommittee on Transportation and Infrastructure for taking the time to visit our city as a part of its oversight visit of the State of Texas. We appreciate the opportunity to meet with you and to make known our city's surface transportation needs. The fact that you have made the time and effort to visit with us here today is representative of your genuine commitment to ensure the development of adequate and necessary infrastructure which supports transportation locally and throughout the United States and internationally as well.

  Let me start off by giving you a bit of background on the city of Laredo and south Texas as a whole. Laredo is recognized as the fastest growing city in the state of Texas and the second fastest in the country. Our city's current population is estimated at about 158,000 people and it is projected to grow at a rate of 4.4 percent annually during the next 5 years. This tremendous growth in population together with the vast commercial and residential development is directly attributable to the role Laredo plays in international trade between the United States and Mexico.
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  Laredo is unique in that it operates bridge systems with two Mexican states, the state of Tamaulipas and the state of Nuevo Leon. As a result of our operations between these two giant states in industry and in international trade, we have, since 1990, seen our cross-border truck shipments through the Port of Laredo increase dramatically from 452,000 to over 851,000 in 1995. This equates to an 88 percent increase over this period.

  In a similar manner, because not only do we deal with road transportation, over-the-road transportation, we see ourselves as an intermodal facility. With ISTEA in place and with the great leadership that is being provided through the Department of Transportation, particularly Mr. Rodney Slater of the Federal Highway Administration and of course Secretary Pená, we have been able to develop our intermodal capacities and as well as being a leader in the trucking shipments between our two countries, we are also a leader in freight through rail as well as air. And in similar manner, the cross-border rail shipments have increased 72 percent since 1990, from a little over 92,000 in 1990 to 168,000 in 1995. It is estimated that we are currently handling about 60 percent of all the U.S./Mexico trade, and more so than any other Texas city on the border. That being the case on the air side as well. Just as a footnote, we are the eighth largest volume handler in cargo for Latin America, here in the city of Laredo.

  The City of Laredo supports the reauthorization of the Intermodal Surface Transportation Efficiency Act, or ISTEA, legislation, which provides the necessary approval and financing essential for transportation projects. In my prepared statement, I have listed a total of 12 projects at $72 million, but I would like to focus my comments in my summary to this one project that we have currently working in conjunction with our sister city of Nuevo Laredo.

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  It is essential for us to make sure that ISTEA is reauthorized so that we can continue to proceed with the construction of our fourth international bridge, the Laredo Northwest International Bridge. It is through a Memorandum of Agreement with the Texas Department of Transportation, of which I would like to add that Senator Judith Saffirini of the state Senate has been instrumental in developing strategies and taking the lead in making sure that we have the necessary attention on the border at the state level. And if it was not for her hard work and dedication as well as our Representative Henry Cuellar, we would not be able to get a lot of this coordination that has been very effective for us to work.

  It is agreed that they will lend, in this particular case, our fourth bridge, $11.3 million in Federal interstate maintenance appropriations to the Texas Turnpike Authority. That being the case, with this loan, we will be able to construct it yet. We are still seeking financing from the General Services Administration import loan.

  I would like to conclude my comments by saying that on behalf of the City of Laredo, I respectfully request that the Subcommittee on Transportation and Infrastructure consider the projects that we have submitted for the record, but in particular our fourth bridge project, because the NAFTA mandates require adequate infrastructure be placed so that we can continue to increase our trade partnership with Mexico and Latin America. And on behalf of the City of Laredo, again, I would like to thank you for being here and allowing us the opportunity to speak.

  Mr. PETRI. Thank you.

  And representing Mayor Garcia is Alfredo Montes, the Director of the Economic Development Office of the City of Nuevo Laredo. Thank you very much.
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  Mr. MONTES. Gracias.

  Honorable members of Congress, honorable officials of this city and the Federal States of the United States and Mexico, ladies and gentlemen, it gives me enormous satisfaction to have the opportunity to address you myself in representing our Mayor of Nuevo Laredo and Tamaulipas Antonia Monica Garcia Velazquez, who is in St. Louis, Missouri on an economic mission. It was not possible for her to be here today. Through me, she wishes to express her gratitude to the Subcommittee of Transportation of the House of Representatives for participating in this event, and she sends you her warmest greetings.

  Today, we want to give testimony to the excellent and fortunate relations that exist between the cities of Laredo, Texas, and Nuevo Laredo, Tamaulipas. As a result of this relationship, the name of ''the two Laredos'' has come about to name this region.

  There have been many years of joint work and close coordination, during which the government of both cities have been interested in mutually beneficial projects. The results has been agreements on projects concerning plants as well as the infrastructure. Specifically, we can cite as an example the urban charter of the two Laredos, an exceptional work of its kind for dealing with one region formed by the people of two countries.

  Likewise, today we are developing an ecological agreement for the two Laredos, besides working intensively to achieve the construction of a new international crossroads, but we will talk about that later.

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  We are very pleased with the existing atmosphere of collaboration, and we are also very optimistic that the bonds of friendship will be more intense each day.

  The North American Free Trade Agreement (NAFTA) has meant for us many important aspects of growth in trade. Nevertheless, it represents a challenge for our countries, and especially, because of the geographic situation, for the two Laredos, where the greatest number of imports and exports between the two countries is generated.

  Statistics give data that suggest that within 5 years, that is to say, at the beginning of the new millennium, the level of trade between Mexico and the United States will have doubled. Thus, without a doubt, we are facing an opportunity, but also a challenge that places on us a great responsibility. When we speak of responsibility, we are referring to an absolute awareness of what is needed, as well as a sincere effort to achieve it.

  It is because of the strategic nature that we believe that this project has that we especially want to mention the future construction of the new international crossroads, the so-called ''Nuevo Laredo Bridge III and IV,'' and its resulting modernization of the transportation infrastructure.

  In Mexico, the new bridge will be built together with the port and highway infrastructure; it should be sufficient to give adequate service to the commercial and tourist traffic.

  We are confident, upon observing the affection that both countries have shown for this project, that the construction will be completed by the dates that we have jointly proposed.
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  Ladies and gentlemen, we most cordially welcome you to these border cities, the two Laredos, Nuevo Laredo and Laredo. Thank you for allowing us to participate in this meeting.

  Mr. PETRI. Thank you both very much.

  Mr. RAMIREZ. We are prepared to answer any questions, if you should have any, Mr. Chairman.

  Mr. PETRI. I just have one question. We had an opportunity yesterday afternoon to drive around some on the American side of the border and several of us had an opportunity to walk around the Nuevo Laredo downtown area. How important is this plan for another bridge in moving trucks out of the congested downtown area to the periphery of the city and is this something that you think will benefit shippers from around Mexico and the United States as well as each of our communities? What is driving this, is it city convenience or is it----

  Mr. RAMIREZ. No, no. It is absolutely a city need and it is clearly two-fold. One is because of the increased amount of volume that we encounter within really the hearts of both cities, our downtowns, that we are not only eliminating the efficiency of international trade by creating congestion, but we are also putting in peril our citizens. So it is two-fold in that regard, that we want to help expedite commerce between our two countries but also be able to work under a safe environment that protects not only the industries that are involved in international trade, but our communities as well.

  And the third subject on the construction of this bridge is that we recognize that the trade between our two countries will continue to grow. As Mexico prospers so do the border communities, and in fact all the way through the different states of the United States. So this fourth bridge for us is essential.
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  And as an aside, we have already established and both city councils have agreed upon what is called a master plan for development and it is not only the roads that we have talked about developing long-term between our two cities, but also industrial development and commercial and residential development as well. So this fourth bridge is of paramount importance, not just for the two Laredos, but really for our two nations, to help expedite commerce, but more importantly for us at the local level to provide safe and adequate protection to our citizens and to the industries as well.

  Mr. PETRI. Do you have anything to add?

  Mr. MONTES. Yes. It is important to reflect at this time that one of the principal objectives of NAFTA is to eliminate the obstacles for free commercial interchange. We hope there will be a substantial increase for those countries who belong to this treaty. Obviously, when we speak here in our document of how the increase that we expect to have is a challenge, it is because we feel the responsibility of having to give the service to this flow of international traffic of merchandise that will be generated because of this substantial increase. As Saul said, evidently upon consolidating our plans with respect to the third bridge and the fourth bridge in Laredo, at the same time we will also have to make a plan of development in which we have other places where we will try to establish mechanisms for the development of tourist attractions as well as industrial attractions, and also the orientation of the cargo to go through those bridges so the central sectors of our cities will remain free for our daily jobs and daily lives.

  Mr. PETRI. Representative Bonilla.

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  Mr. BONILLA. Mr. Chairman, just a quick question for Mayor Ramirez.

  Over the last 10 years, Laredo's infrastructure has burst at the seams. We have seen--you remember in the early 1980s and in the 1970s how different Laredo was then. If you will just let the Committee know, about how things have grown so fast over such a short period of time. And of course, this does not only just affects life here and transportation needs here, but also goods shipped to other states or from other states moving south. How quickly has this occurred and how Laredo has done a great job of trying to keep up with the increased traffic but we continue to burst at the seams in terms of infrastructure.

  Mr. RAMIREZ. Thank you, Congressman.

  Well, to give you an idea, I did mention some statistics as of 1990, but if we were to go back to say in the early 1980s, our city was quite different. The commerce that we enjoyed with Mexico was at an all time high, but it was for the wrong reasons. Mexico was on a spending splurge and it was just really for us a preview of what economic growth was to come once Mexico entered into GATT.

  Our infrastructure has long been neglected and but not for these last 5 years or so, really going back about seven, we would not be able to keep up with the incredible growth that we have experienced so far. Our geographic location makes us the ideal crossing point for commerce between the two countries. As such, not only is our geographic area prime for international trade, but we have the most professional and capable international trade community along the border. So they look to Laredo and Nuevo Laredo for these services.

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  The problem is that we have yet to be able to paint a complete picture and that is perhaps our fault to a great extent, but I think part of it has to do with that people like yourselves have not taken the time to come and appreciate what international trade is all about. It is very difficult to say we affect Pennsylvania, we affect Michigan, Arkansas and all states throughout the United States here in Laredo. So that without the necessary infrastructure, Congressman, we would not be able to continue to serve as effectively this trade.

  So, we are looking for, through your Subcommittee and the recommendations that you make, a very resounding effort of support, which I know will be forthcoming in regards to this infrastructure, because it is of national importance for us.

  Mr. PETRI. Any comments, Mr. Montes?

  Mr. MONTES. Adding to what Saul just said, evidently your visit here has given you an idea and a clarity of vision of the demand for the services of international traffic that this port has here every day, and in the same manner that it has required a very efficient infrastructure to take it, we also need a very efficient system to operate that new infrastructure. So the authorities of Immigration and Customs, Mexican as well as American, have implemented systems that we feel are adequate with the adjustments that they will have to make as this thing grows, so this infrastructure can really be efficiently operated.

  Mr. PETRI. Gentlemen, muchos gracias--thank you both.

  Mr. RAMIREZ. Thank you very much, Mr. Chairman, members of the Committee.

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  Mr. GEREN. Mr. Chairman.

  Mr. PETRI. Yes?

  Mr. GEREN. Could I ask a question of the Mayor please?

  Mr. PETRI. Sure.

  Mr. GEREN. Mayor, could you talk briefly about the timetable for the fourth bridge? You and other members of the community have made a strong point to us the urgency of that bridge. Have you seen good support from the private sector in putting together this partnership to build the bridge? If you could talk a little about that, what contributions the private sector have made to try to move this project along, and tell the Committee about I guess the elements of the partnership that have come together to bring this about.

  Mr. RAMIREZ. Thank you very much, Congressman, for the opportunity to answer that question.

  Certainly we do not--although public transportation falls on public entities, the way things have developed we look for private/public partnerships. In this particular case, the private sector has come through with over $7 million worth of commitments by way of land primarily to make this project a feasible project for all of us to construct and to better serve our community. If it was not for the strong support of the local transportation association of this project, because they will be the most affected by this as a result of creating greater efficiencies for them, and their support in getting out the kind of partnership that in fact is private with the $7 million, the City of Laredo coming in with another $11 million of its own financing, and then the Federal Government through the Department of Transportation committing to highway improvements to the tune of about $22 million. Regrettably those funds have not been allocated, the $22 million, the Federal funds--the rest have--because of constraints with the reauthorization of ISTEA in particular and what that affords.
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  So most definitely, we would not be able to make this project a go, if it was not for the participation of the private sector and their strong leadership in making our concerns known through their industry how important this bridge is to trade between our two countries, Congressman.

  Mr. GEREN. Thank you, Mayor. Thank you, Mr. Chairman.

  Mr. PETRI. Thank you.

  Ms. Johnson.

  Ms. JOHNSON. Yes, thank you.

  We looked at the third--fourth--bridge yesterday, whatever number is appropriate, and learned that from the Mexico side that there was not a reciprocal type of bridge and the activities that are important to surround it. Are we going to be certain that if another bridge--and I know it takes a long time to build a bridge, but if we commit to another bridge, are we going to have assurances that from the other side of the river, the efficiency could be there? We acknowledge that we saw this bridge with not much traffic.

  Mr. RAMIREZ. First let me--and I will yield the answer to my counterpart from Nuevo Laredo as to the kind of commitments that are coming to the table on their behalf. Recognizing that we are dealing with two states here, the state of Tamaulipas, which is this current bridge, and the state of Nuevo Leon, which has the Columbia Bridge. As a matter of fact, the Columbia Bridge, even though they say it is a white elephant or that somehow the Federal Government got cheated, it is the fourth largest volume handler right now, even at its slow pace, of all border crossings along the United States, the fourth. And if it was not for our two crossings with Tamaulipas, it would probably be higher because we are ahead of that bridge.
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  And so the volume that we handle at that bridge is not the capacity it is able to handle, but we need to also recognize that we are dealing here with another state and it is as if we were trying to--and that is another very important point.

  Ms. JOHNSON. But it is the same country.

  Mr. RAMIREZ. Yes, it is. But I am sure you recognize that when we have got Oklahoma and Arkansas competing for an interstate, they are each going to try to do the best they can for their respective interstates. It is the same thing in Mexico.

  Ms. JOHNSON. Right. But it comes from the Federal--ours comes from one government, the Federal Government of the United States.

  Mr. RAMIREZ. Right.

  Ms. JOHNSON. And that is going to be one country too, the country of Mexico.

  Mr. RAMIREZ. Right. And as far as the efficiencies, on the Columbia side, we were able, by agreements between both sides locally to deal with things like the environment and such, but commerce itself and the promotion of it is more of a state activity. And as such, we are there to service it as best we can.

  But I would like to yield to my counterpart in Nuevo Laredo to answer that question, Congresswoman.
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  Ms. JOHNSON. Sure.

  Mr. MONTES. Yes. As far as you are concerned that we would have the efficiency and the installation in the Mexican systems and reciprocity of those that you witnessed on the American side of Laredo III and Laredo IV, you can be absolutely assured that in Mexico we are doing everything with the right type of planning and programming and it is a very special case because it is a case in which one city like Laredo has a frontier with two Mexican states, and the Federal Government has decided and made an announcement just recently that both bridges, the one of Columbia like the one of Nuevo Laredo number three, in the future would have a modern traffic flow that would go to Kilometer 22 on Highway 85 in Mexico, giving a tremendous fluidity to the movement of vehicular transport through that bridge. Along with this, we are also contemplating the elaboration of a port that would give sufficient services for the increase in vehicles that we are expecting. We are saying that if today almost 4000 vehicles, both loaded and unloaded, are crossing to the United States from Mexico, then for the year 2000—2001, we are talking about 10,000, maybe 12,000, and we will have to be efficient in our programming and our planning in order to be efficient at that magnitude.

  Even more, the growth that we expect will also bring benefits to the region and that includes, obviously, Columbia, Nuevo Laredo III and the two Laredos.

  Ms. JOHNSON. Thank you. Just one follow up.

  Recognizing that there are very few countries of course that we connect with bridges and so clearly the ports, the business of the bridges are going to be between Mexico and this country and I fully understand and appreciate the kind of jobs that it creates to have the traffic going into Mexico in my district in Dallas. But at the same time, you know, money is very tight and I want to be sure that we can maximize the investment. So notwithstanding it being two states, you know, Texas is probably five states, but we still have to--this money you are requesting is coming from the United States.
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  Mr. RAMIREZ. Right.

  Ms. JOHNSON. Not from Texas.

  Mr. RAMIREZ. Right.

  Ms. JOHNSON. Not altogether--not even 50/50.

  I am concerned and I know that this gentleman is representing a Mayor, but I am still concerned about the value of the investment as it relates to the efficiency from the other side. And I would feel much more confident if I had the assurance that in the next 10 to 25 years, we are talking about this bridge, that we are also meeting a comparable reception from the other side.

  Mr. RAMIREZ. Let me address that a little more in detail, Congresswoman.

  Under our agreement, before we even start the construction of the bridge, in this agreement we are coming to an understanding that first the loops, the loop that will lead to the bridge on the Mexican side will be constructed, that the necessary infrastructure to that bridge will be built first and that all necessary precautions to protect our environment are in place prior to us proceeding. So that we are making sure that the efficiencies are built in in front and not at the tail-end of the project. Because you can build the bridge but the bridge can lead to nowhere.

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  Now let us talk a little bit more about the revenues. The United States is putting this money into the project. You also, I think, need to recognize the fact that out of the Laredo port over $200 million are collected every year in duties and an additional $40 million are collected in user fees, a year. So that we are not just asking hat in hand for something that we are not able to reciprocate as a community, because we are, apparently by the duties that are paid to our treasury. So we are trying to just say we would like for us to secure some of that funding so that we can continue to maximize the kind of revenues that are coming into the United States through this port.

  We feel that because of the aggressive approach that Tamaulipas has taken--and you also need to understand that by Mexican law, that the states get a percentage of the total volume of duties that are collected from the ports that cross into their states. So the initiative for people from Tamaulipas to ship their shipments over to Nuevo Leon is not there. But just coming from the infrastructure conference that was held in San Antonio on border crossings, we feel that there have been great steps that have been taken on the part of Mexico to decentralize their government and to allow for municipalities like Nuevo Laredo to have more local authority to make things happen, because still many things are driven from Mexico City and not from the local level.

  One fine example is that now Nuevo Laredo will have the resources within its own coffers to make all of these improvements necessary because the Mexican government has handed over to them the concession to collect the tolls at this bridge. So now they will have the resources and not just the bridge, to be able to do it.

  Ms. JOHNSON. Thank you very much. I am very fiscally conservative, you know.

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  Mr. RAMIREZ. I understand and I can appreciate that. So am I.

  Mr. Chairman, thank you very much.

  Mr. MONTES. Just to add to what the Congresswoman said, for the Mexican economy, international commerce has been of vital importance and the expectancy for this year is for growth in exportations that will grow more than $100 million. If we consider that 80 percent of our international commerce is with the United States, and of those operations, 50 percent are through Laredo and Nuevo Laredo, our government is completely conscious that we need to modernize our infrastructure to be efficient in this operation. This is very clear to all of us, and it will be put in the future of our country since NAFTA spells out these expectations and what we have to do with them.

  Mr. PETRI. Well, again, thank you both.

  Mr. GEREN. Mr. Chairman, could I ask a quick question to Mayor Ramirez. I think it will just take a second to answer.

  Mr. PETRI. Yes.

  Mr. GEREN. Where are you in the planning process on the fourth bridge as far as right-of-way donation and environmental impact statement? What is the timetable, what are we looking at as far as being ready to go?

  Mr. RAMIREZ. We are looking at a window of approximately 2 years so that we are crossing the first truck on the bridge. We have already done almost the entire environmental assessment of our side of the border. There has been a discussion on right-of-way leading to the bridge itself because of offers that have been made by the private sector that are currently being reviewed. But I would like to say that the Texas Department of Transportation, particularly Chairman Laney, have been instrumental in moving this project along. And if it was not for the partnership that they bring to this table, it would not be possible. So we are looking at about 2 to 2 1/2 years before we are crossing the first truck.
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  On the Mexican side, Alfredo can better answer that question, but I know that in certain respects they are ahead of us in certain regards. Alfredo.

  Mr. MONTES. We have worked together and we can say that we are going at almost the same rate as Laredo. In fact, it is practically at the point that as for the construction of the bridge, the Federal Government, state government and municipal government will have worked with the private sector and we estimate that after the termination of the conceptual projects, we believe perhaps that by March of next year, we will be commencing the construction. We estimate it will be between 16 and 18 months. It is very important to note that at the same time the Federal Government through the Communications and Transportation Ministry, will be constructing the approaches to the bridge III to Kilometer 22 of the Highway 85 to Monterrey.

  Mr. RAMIREZ. Thank you very much, Mr. Chairman.

  Mr. PETRI. The second panel consists of the Honorable Rodney E. Slater who is the Administrator of the Federal Highway Administration of the U.S. Department of Transportation who has been traveling regularly in the last week or so to Texas for various meetings, accompanied by George Reagle, the Associate Administrator for Motor Carriers and Mr. David M. Laney, the Commissioner of Transportation for the Texas Department of Transportation.

  Gentlemen, welcome and we look forward to your testimony. Mr. Slater, would you like to begin?

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  Mr. SLATER. Mr.Chairman, Mr. Rahall, other members of the Committee, especially Congressman Bonilla and Congresswoman Johnson, Congressman Geren, it is a pleasure to be in Texas and also it is a pleasure to see the individuals like Congressman Borski, a member of the Committee and others who are from far away places to actually come to the border to be a part of this most important observation process with you, to deal with issues that you have had to grapple with for some time. So it is a pleasure for me to be in the company of all of you and to once again return to Laredo.

  Earlier this week, I attended an infrastructure conference in San Antonio, and at the beginning of my remarks, after having heard a number of speakers over the course of the morning, as you will hear over the course of this day and your visit, and their dealing with the various expectations of NAFTA, I was reminded of a quote by jurist Oliver Wendell Holmes who once said that once the mind reaches forth to embrace a new idea, it can never ever return to its former state. And clearly, as we have dealt with the implications of NAFTA, our minds have reached forth to embrace the great possibilities that it represents and we have all seen that we as a nation can benefit greatly from what actually occurs along the borders that we share with our number one and number two trading partners, Canada and Mexico. And this hearing really gives us an opportunity to, as the city administrator noted on yesterday I understand, to see beyond what we can see. And again, I appreciate the opportunity to be a part of this great endeavor.

  But clearly, in order to see beyond what we can see, we have to first see what we can see. I had the opportunity in 1994 to actually engage in my first road tour that began in Buffalo, New York at the border that we share with Canada, our number one trading partner, and over the course of 14 days, I traveled through 14 states and visited with hundreds of individuals, and the objective was to do as we are doing here today, to listen and to learn firsthand from state and local officials and ordinary citizens about how transportation is so important to their quality of life. And when I reached Laredo, at the southern end of my trip early that April morning, I was greeted at the border by scores of state and community leaders and trucking inspectors and I joined in the inspection of a tractor-trailer that involved also Mexican officials as well as Texas Department of Public Safety officials. I also attended an FHWA hazardous material training course given for U.S. Customs Service personnel working at the border. More importantly, I saw a spirit of partnership that all of you have alluded to in your opening remarks and as represented by our first two speakers. It is this partnership, I believe, that will make the difference here along the border and will make a vast difference in the economic prowess of our nation throughout the coming years.
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  I would like to begin my remarks by emphasizing that the Department of Transportation is committed to a safe and efficient implementation of the North American Free Trade Agreement, and I think we are very, very fortunate in this regard to have our Secretary of Transportation, Secretary Frederico Pená, who is actually a native son of this region, leading us through this process. He was born right here in Laredo and raised in Brownsville. And the Secretary knows firsthand many of the border issues that we are now discussing. These are issues that are close to his heart as he leads us in making the most of this age of possibility, this new dawn, begining of a new era, if you will, before us.

  Many of you know that during December of last year, the Secretary visited the border, and he witnessed all of the expectations but he heard a lot about concerns regarding safety and the operating conditions of commercial vehicles crossing the border into the United States and our commercial zones. I can tell you that inspections of trucks crossing into the commercial zones of late actually support the view that safety problems still exist.

  All of you know that on December 18, consistent with the liberalization schedule set forth in NAFTA, the United States began accepting applications for Mexican motor carriers to operate in the United States in our border states of California, Arizona, New Mexico and Texas. Disposition of these applications, however, has been delayed until further discussions can be held with our Mexican counterparts to resolve certain safety concerns. These negotiations are going forth very well and we do believe that they can be resolved in a reasonable period of time.

  Again, I want to emphasize that our goal in these discussions is to develop a bilateral strategy to assure that all carriers are in compliance with safety and insurance obligations prior to beginning cross-border operations. The administration's implementation of the NAFTA surface transportation provisions focused primarily on four areas--standards compatibility, enforcement, training, education and outreach and then finally border infrastructure. And if I may, I would like to just touch on all of them very, very quickly.
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  As relates to standards compatibility, NAFTA established a land transport standard subcommittee to develop working plans to achieve more compatible standards related to truck, bus and rail operations and the transportation of hazardous materials among, Canada, Mexico and the United States. We have already made considerable progress toward compatibility of motor carrier standards. For example, the three NAFTA countries have agreed to adopt common inspection standards for a minimum level of mechanical fitness for all commercial motor vehicles operating in international commerce. The United States has also negotiated reciprocity agreements with both Canada and Mexico as it relates to commercial drivers licenses so that commercial drivers licenses from any of the three countries will be recognized in all three.

  With respect to the very important issue of vehicle sizes and weights, and I am sure the members of the Committee are very interested in this, let me assure you that there are no proposals for changing existing U.S. requirements or establishing special corridors for longer combination vehicles at this time. There is no provision also in NAFTA that exempts Mexican or Canadian commercial vehicles from our Federal and State safety and operating standards. And more importantly, if such a proposal were formulated, it would have to proceed through Congress, so we would have to come to the Congress for your approval and there is no desire at this time to make that kind of request of you.

  Although NAFTA does not require a set of continent-wide standards, we all share the principle that comparable safety standards based on the highest, and not the lowest, common denominator should be our goal and that is what we are striving to secure and to achieve.

  On the issue of enforcement, NAFTA does not exempt Canadian or Mexican commercial vehicles and drivers from complying with our safety standards. And each country retains the right to adopt and enforce safety standards that are more stringent than those in effect in the other NAFTA partnering countries. We are strictly enforcing and will continue to enforce our current safety standards and requirements as relates to Canadian and Mexican trucks, buses and drivers operating in our country. Foreign carriers must use drivers meeting qualifications comparable to those in the United States and must operate vehicles meeting U.S. safety and size and weight specifications. Our enforcement efforts are comprehensive and in partnership with other State and local and Federal entities we have established a permanent presence and consistent enforcement presence along the border, and we will continue to work to enhance this effort.
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  Also, as relates to training, education and outreach, we are engaged with our State and Federal partners in a comprehensive series of NAFTA awareness seminars in various locations and have distributed information about our motor carrier safety program and requirements in both English and Spanish to motor carriers and drivers operating within the United States, and will continue to be aggressive in that regard as well.

  And finally, dealing with the question of border infrastructure, the key development of an integrated North American transportation system at the various ports of entry on both our northern and southern borders will be critical in order to make NAFTA a reality. Congestion, as you know, at these ports of entry cost shippers and carriers time and money, place heavy demands on border infrastructure and may seriously degrade the quality of life of border communities. It is our commitment to reduce border congestion to the extent feasible, and in order to do that, it will take a cooperative effort involving Federal, State and local officials, the kind of partnership spirit as represented by our hearing today.

  Maintaining and selectively improving approaches to major ports of entry consistent with state priorities will be our chief objective. Even with new investment, however, additional needs will still exist, especially at major highly congested international gateways. With some exceptions, we have found that the major causes of border congestion are not infrastructure related at all. They are institutional and operational in nature and I think we are going to get to some of that discussion over the course of this hearing. The potential for operational and institutional improvements, including the use of advanced technology and data interchange should be examined, we believe, before major ports of entry engage in significant capital investment. Again, we need to make the best use of the system we have dealing with institutional and operational inefficiencies before we make some of these major investments in infrastructure capacity.
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  And then finally, we are using ITS technologies to electronically recognize commercial vehicles and to check relevant safety and customs and immigration data before they even arrive at the border. And we have got a couple of operational tests underway now. We are also looking at the possibility of doing more across the border in the coming years.

  And then, we are looking at innovative financing techniques, much like the techniques we are using with the Laredo IV bridge. We also have state infrastructure bank opportunities now existing in three of the border states that make up the ten total that we have identified--Arizona, California and Texas among that number. And we hope to continue to gain through the use of these innovative financing techniques, so as to bring additional dollars to the table to enhance the Federal investment and to leverage additional state and private sector resources in that regard.

  In closing, let me just say that this is a great opportunity for us to deal with issues that affect not only the health and resolve and the well-being of the border communities but will have a significant impact on the overall health and quality of life and economic well-being of our nation as a whole. And I am pleased to be a part of this hearing, pleased to be here flanked by my colleagues and to have this opportunity to address this very important concern with this Committee.

  Mr. PETRI. Thank you. Mr. Laney.

  Mr. LANEY. Thank you, Mr. Chairman, and good morning. Good morning to members of the Subcommittee.
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  It is a pleasure to be here and first of all to have the opportunity for the first time to meet Mr. Slater, who we have no doubt exchanged lots of information on different occasions and it is delightful to be here.

  I thank you for bringing the ISTEA reauthorization hearings to Texas. I understand you partook of a little of the local color--at least some of you--a little of the local color last night and I have been admonished to speak slowly and quietly.


  Mr. LANEY. As you are discovering, among other things, the Texas transportation system along the border and throughout the state serves a very key role in the nation's international trade efforts. On behalf of the state, I am pleased to welcome you to Texas and to be here today to give you at least a part of the Texas perspective on border transportation infrastructure and international motor carrier safety.

  Because most of the traffic goes through Texas and Texas ports of entry, the Texas highway system is perhaps the most critical part of the NAFTA transportation network. Eighty percent of all overland truck and rail trade between the United States and Mexico travels through Texas. Texas bridges and border crossings are already among the busiest ports in North America and the volume of traffic across them is expected to grow very significantly, as you know, over the next few years under NAFTA.

  By all accounts, at least by our accounts, border crossings are already operating at capacity. Furthermore, traffic along three main arteries for the transport of goods from Mexico into and through Texas--U.S. 59, I—35 and I—10--is expected to increase very dramatically between now and the end of the next decade.
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  We recognize also that the border area is vital to our state's prosperity. Even with our tremendous funding limitations, the transportation commission of our state has targeted funds specifically to respond to the NAFTA. Within the last few years, we have stepped up our investment in projects to improve the transportation infrastructure throughout the border region. By the end of fiscal 1998, we expect to have over $400 million in projects under construction. Long range plans call for the department to begin constructing a total of almost $1.4 billion in border region highway improvement projects within the next 10 years.

  Under today's formulas for distributing Federal highway funds, Texas and other states receive no additional funds to respond to the burden placed on our highways from carrying international trade destined, in large part, for other parts of the country. We simply cannot carry that burden alone. Texas, the state with the largest number of border crossings along the U.S. border to Mexico, believes that the most recent Federal Highway report to Congress with respect to border infrastructure capacity does not adequately reflect the true conditions and the needs of the highway infrastructure at our ports of entry. We believe a more thorough investigation is needed and I would strongly encourage the Committee to ensure that further action is taken to fully understand the border infrastructure needs.

  But beyond the need for Federal attention to international trade and other transportation needs, the Federal highway program structure itself requires, in our judgment, in-depth consideration and revision. In that regard, we are very clearly, in my judgment, in a transitional period in transportation in this country and it is felt nowhere more acutely than along our borders. For the most part, the interstate system, now 40 years old, is no longer the focal point of transportation policy in our country, but it is still very much the core of our surface transportation system. And it is rapidly deteriorating, particularly along our borders. And the concept of a national highway system, a vital concept, very important, and a concept that serves a number of purposes but now at least risks competing with our interstate rehabilitation dollars and poses concern for some of us in states such as Texas.
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  Rebalancing the redistribution formulas more appropriately is important to us, and Texas stands to benefit, particularly if we are successful with your help in proceeding along the lines of what has now become referred to as Step 21, but it is only a partial solution and perhaps temporary, slight recalibration of the status quo, but very important and something we support very strongly.

  Mr. Slater mentioned state infrastructure banks. They are a very valuable experiment in transportation financing and something we encourage. We are fortunate to be one of the pilot program states and look forward to the implementation of that fully over the next months and years.

  Mr. Slater also mentioned border infrastructure capacity and what he referred to as operational or institutional issues. Those are very important. There is no question that there is very little that is more medieval in this country than the combination of systems and activities that slow border crossings down. They need to be addressed and they need to be understood, and the understanding may be more difficult than the challenge of building new infrastructure.

  But that alone is not the solution, we do have infrastructure capacity problems. Nonetheless, the best infrastructure in the world will not create a smooth flow across our borders unless we address institutional and operating processes.

  We are by no means critical of these kinds of concepts, whether it is the national highway system, Step 21, in fact we are very much proponents of change. But they represent, in our judgment, simply a nibbling at the margins of the bigger issue. In a way, ISTEA gives us the most appropriate juncture that we are going to see probably during our tenure in the offices we hold to step out on the field and meet the challenge head-on. We encourage your efforts. You know Texas and the Texas Department of Transportation is very much behind you and in support of whatever needs we can help attend on your behalf.
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  But let me conclude my comments by stating that Texans very much welcome the increased economic opportunity that full implementation of NAFTA will bring to Texas and the rest of the United States. In Texas, despite the action on December 18, we are very much ready to open the door of free trade to our southern neighbors. We are investing much effort and a considerable amount of our funds in preparing the Texas transportation system for the future while striving to meet the traffic and the maintenance needs of today. As our nation's economy grows and the international traffic increases along Texas and the rest of the United States, the challenges will rise exponentially. And we expect to be your partners and certainly hope to be invited in moving into the next century in dealing with transportation.

  Thank you very much for the opportunity to present my comments to you today, and I would be pleased to answer any questions that you may have. And I hope I spoke softly enough.

  Mr. PETRI. Gentlemen, thank you both for your statements.

  Are there any questions? Yes.

  Mr. BORSKI. Thank you very much.

  Mr. Administrator, I wanted to talk a little bit about the size and weight issue.

  Mr. SLATER. Yes.

  Mr. BORSKI. How is that coming along? Obviously in the United States, we have an 80,000 pound limit and in Mexico I think it is 97,000 pounds.
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  Mr. SLATER. That is right.

  Mr. BORSKI. Is that harmonization working at all? How is it working? And you mentioned in your testimony that there were no provisions that exempt Mexico or Canada commercial vehicles from our operating, and a comprehensive study about truck size and weight--you mentioned at this time there are no plans to change. Do you anticipate any change in ISTEA in truck size and weights for the United States?

  Mr. SLATER. Let me take the first part of your question first and then move to the other portions.

  First of all, the comprehensive truck size and weight study is proving very, very beneficial. We had not engaged in such a study effort in this country for over 30—40 years. So it is giving us the kind of insight into a comprehensive overview and assessment of a process that resulted over years in sort of a piecemeal, sort of haphazard kind of way. We think that that will be very helpful to us as we deal with what some of the new demands are in the coming years, as relates to trying to grapple with questions of harmonization and compatibility. So the study is proving well and proving very successful in that regard.

  The harmonization and compatibility process is going along very well, the negotiations continue. We think we are going to be able to address most of the critical issues there. But everyone recognizes that each country has the right under NAFTA to have a stricter enforcement inspection kind of apparatus in place and everyone respects that. But clearly the spirit of cooperation and seeking a system of compatibility is our goal, and I think we are going to get there.
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  And I do underscore again that there is no anticipation on our part that we will in any way modify our truck size and weight regulations at this time.

  Mr. BORSKI. I would just like to add, if I could, Mr. Chairman, that any change in truck size or weights would be controversial, to say the least.

  Mr. SLATER. Oh, definitely.

  Mr. BORSKI. And it would be something that I would wish that if you are contemplating such, we would know about it well in advance of ISTEA.

  Mr. SLATER. Right. There is no intent at this time to do that. And as I noted sort of closing my comments on that point, clearly everyone recognizes that any effort like that would involve the Congress and you would be informed clearly early enough in the process to take the action that you would have to take. But at this time, there is no plan to do that.

  Mr. BORSKI. Thank you.

  Mr. RAHALL. Will the gentleman yield?

  Mr. BORSKI. Be happy to.

  Mr. RAHALL. I am sure the gentleman from Pennsylvania would like to ask that same question to our last panelist today as well. He has answered it before, and I believe the Administrator has been in attendance, that even the American Trucking Association has no plans to offer any changes.
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  Mr. SLATER. Exactly.

  Mr. BORSKI. I think that is our last witness coming up today.

  Mr. RAHALL. Yeah. What did I say? You can ask that question of our last witness today.

  Mr. PETRI. Mr. Geren.

  Mr. GEREN. Thank you, Mr. Chairman.

  Mr. Administrator, regarding the delay in the implementation of access to motor carriers to our country and ours to Mexico, do you have any sense now--do you all have any kind of internal timetables to force these issues to be addressed? I am concerned without any sort of timetable a lot of these issues are going to drag on and drag on and drag on and as we all know there are many people in I guess both countries who remain unreconciled to that aspect of NAFTA. And a concern I have is that without any kind of definite timetable we may never get there. There is always going to be something else that needs to be done before we are sufficiently satisfied to allow this to go forward, and it is absolutely critical to implementation of NAFTA for that to happen.

  Mr. SLATER. Your point is well taken, Congressman. Let me say that we, on the 18th, did start the application process and we have received a number of applications at this time. The ongoing negotiations continue, we have a meeting, our next meeting is this month I believe. And these are meetings at the highest level. We are getting much closer to resolving the safety and security concerns that were identified and I think we are going to get to a conclusion of this matter in a reasonable period of time, but I cannot give you a date certain.
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  I do know that at all of the meetings, the whole issue of timing is a matter of serious discussion and we are getting there. I mentioned in my remarks that there are many things on which we have agreed thus far. And again, what we would like to see is a comprehensive safety regime established in Mexico that would meet many of the kinds of safety demands that we require of our motor carriers here in the United States and we are moving very close to that.

  Mr. GEREN. Mr. Chairman, could you speak to that issue?

  Mr. LANEY. Yes, Congressman.

  There is nothing that is not laudable about concerns about safety, enforcement, issues like that. The concern, at least from our standpoint, is we share those concerns about safety. The Department of Public Safety in Texas was, in effect, rigged and ready to roll on December 18th and as we were at the Department of Transportation. We were surprised, as were they. We remain ready and believe that we would be able to effectively address issues of safety if the border were in fact open as we anticipated it to be on December 18. It is a little bit of a mystery to us, but we share the concerns that you have raised, or at least the issue that you have raised.

  We do not know what the end of the run is from a time standpoint, whether it is an actual calendar deadline or at least some threshold of accomplishment with respect to these discussions. One or the other would serve us well, but there are no thresholds to be reached, to my understanding, at least that have been shared with us, nor are there any deadlines from a time standpoint. And as I think anyone knows who thinks it through, there will always be a few sort of loose ends from the standpoint of safety enforcement and so forth. There are, in any case, within this country and so we are not going to be able to tie them up into a neat package. And without deadlines or internal thresholds, the process could go on literally forever because there will not be an absolute tidy conclusion.
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  Mr. GEREN. Thank you. Thank you, Mr. Chairman.

  Mr. PETRI. Representative Bonilla.

  Mr. BONILLA. Thank you, Chairman.

  Commissioner, I think you make an excellent point about us having been prepared in December to proceed forward with the motor carriers coming across the border. I ask this question with all sincerity to Administrator Slater. Let me emphasize that we are all concerned about safety here, but I think there are some people who are trying to demand an absolute safety net and that does not exist in the real world. I know we would all like to think that every airplane, every truck, every car, everything we travel in is going to be totally, completely safe. And that is just not going to occur. And I ask with all sincerity, how much of this problem and how much of this delay is due to safety concerns and how much of it is due to politics?

  We understand that the forces that influenced the administration to delay the allowance of motor carriers to come across were the forces that were totally anti-NAFTA to start out with. And this area and this state is totally pro-NAFTA and we want to move forward. So with all sincerity, what percentage of this problem and this delay was caused by politics?

  Mr. SLATER. Well, first of all, this is an administration that early on really staked its credibility on the passage of NAFTA and took considerable hits from certain of the forces and organizations that you have made reference to, to make NAFTA a reality. We accepted our challenge and responsibility then and frankly we are of no mind to back away from that acceptance and commitment at this hour. But it is true that there were significant safety concerns.
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  The Secretary and I and Mr. Reagle and others participated in a review of the preparations along the border in early December. Once we returned to Washington, based on what we discovered as a result of that tour and also communications among a high level of officials within the administration, it was determined that we should move cautiously, yet also deliberately.

  We then informed our Mexican counterparts of that decision and ever since that time, we have been meeting on a continuous basis trying to resolve some of the safety and security concerns that were raised at the time. And we are getting very, very close.

  I would also like to commend the state of Texas and its preparations and I would like to note the fact that we were very involved with you in making those preparations, with the addition of inspection officials, with the addition of motor carrier safety program funds that we made available that enabled you to make those preparations. But I think during that period of December 18 for about a 12-week period, we checked in an aggressive way a number of motor vehicles moving across the border and we found a significantly higher rate of out-of-service violations than is the case with U.S. motor carriers, and that was a matter of concern on December 18. We found it to be warranted through that period of inspections over about a 12-week period, and these realities have been made available and raised during our discussions with our Mexican counterparts. And I think we have made a lot of progress since that time and I think we are going to be able to come to closure on this issue in the near term. But we did have a responsibility to U.S. citizens to ensure that safety concerns were addressed and addressed appropriately.

  Mr. BONILLA. Here in the state of Texas we are absolutely committed to that as well. Thank you, Mr. Administrator.
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  Mr. SLATER. Thank you.

  Mr. PETRI. Mr. Rahall.

  Mr. RAHALL. Thank you, Mr. Chairman. I am not going to ask a political question, but I want to ask a question to the Commissioner.


  Mr. RAHALL. In 1956, when the interstate system was created, it took a strong Federal commitment to build that system of interstate roads across our nation. And ever since, that Federal commitment has recognized the differing needs of each state, it has required a donor/donee type of relationship that frankly, I do not think we will ever get away from.

  You in Texas have at least three highways I believe on the national highway system designated as high priority corridors; one of course affecting Laredo very much, Interstate 35. My question is as we move toward the Step 21 proposal, which you endorsed in your testimony, are we still going to have that strong Federal commitment that is necessary to ensure that the national highway system is built like we built the interstate system--not necessarily interstate standards, I do not mean that. But that we build the type of NHS that we need, intermodalism. When you have states that have differing needs, you have states perhaps not as financially well off as Texas that may not be able to build their portions of that NHS system, and therefore it is going to hurt Texas even though you probably are going to answer you can handle it here in the state of Texas, that diminished Federal role. That is my point.
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  Mr. LANEY. That is a good point. Congressman, with respect to the interstate system independent of NHS, we are in sort of interesting reverse roles in that we in Texas are in desperate needs of additional Federal funds for border interstate needs. So not just a theoretical recognition of the needs on occasion of some states that need Federal support, Federal funding, in effect, to maintain interstate issues, the formulas to a certain level made a lot of sense in making sure the interstate system as it was built and as it is maintained stays very viable and very healthy. And the formula that basically redistributes from donor to donee or beneficiary states makes a lot of sense.

  With respect to the NHS system, I believe that some level is probably appropriate as well. I think our position with respect to our support on Step 21 is simply that there is an imbalance, that the formulas are overly protective of the connector issues or the beneficiary states issues. But the NHS system is a very viable and a very vital part of our overall surface transportation needs and to the extent it is inadequately supported by a state's own funding capabilities there needs to be some supplemental funding capabilities. But I believe that the formula concerns that we have in Texas is that there can be over-balance in that direction and I think there has been an imbalance in that direction.

  So it is just a recalibration of the formulas that brings it more into balance that is our concern I think.

  Mr. RAHALL. You are not calling for total retrenchment on the Federal level when you endorse 21, Step 21, like many proponent of it are.

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  Mr. LANEY. I am not. I know a number of us that are part of it are, but I think there is some continuing need, but a much more reduced need for a Federal role.

  Mr. RAHALL. Thank you, Mr. Chairman.

  Mr. PETRI. I just had one question myself.

  You both talked about the relationship between the need for some sort of institutional change as opposed to infrastructure shortfalls. I think you probably gave more emphasis to the need for institutional change to reduce congestion or at the border rather than just building more facilities without changing procedures. Medieval to describe some of them sounds perhaps a little bit strong, but appropriate.

  I wonder if there is any prospect, and I would like your comment on that, as to whether the decisionmaking related to investment in infrastructure could be linked to changes in procedures. Something has to drive it, and it is usually competition from other ways of moving things. I think Columbus came to the new world in part because he wanted to get around the hold that Venetian traders had on commerce over across to central Asia. So new ports or new highways to bypass the whole system certainly is one prospect that people have to be aware of that would cause revenues to dry up if they do not adjust to changing times.

  In that connection, us investing here in the United States but not urging our colleagues in Mexico to invest or make arrangements for pre-clearance of sealed movements seems shortsighted. Investigating, all kinds of different options so goods could move from maquiladora type factories or other facilities without being even stopped at the border seems to me ought to be being actively discussed and worked. Instead we are just focusing on the couple miles at the border and somehow thinking that that is the magic way to deal with all of this, and it never is going to work as the volumes increase.
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  Could you comment on all that and give us some advice as to what we should be doing as people seek dollars for bricks and mortar to make sure that we are not just investing in something that is not going to work very well, but can get some more efficiencies out of the whole system?

  Mr. LANEY. Yes, Congressman Petri, I believe it is probably your experience, as it is any of ours who have sort of looked closely at the operations of the transfer of goods and traffic, in effect, across the border one way or the other, that it is a complex and in some cases labyrinthine process with a lot of moving parts, none of which controls any of the process in and of itself. And yet, there is an important opportunity I think for us to begin to focus on how to refine that process in a way that opens the borders. Please do not read me though as understating our emphasis on infrastructure. Infrastructure is critical. What I am saying is that infrastructure in and of itself is not the resolution of the issue, and I think you all probably had the opportunity to see that in action yesterday. You will see more of it today and tomorrow.

  So there are processes that need to go. And I believe that the notion of some government body, whether it is you or whether it is us, unilaterally taking control of and combing the knots out of the institutional/operational issues is probably unlikely. Whether congestion and the expense and cost caused by congestion mounting at the border drives transportation, as you put it, like Columbus around the corner into ports, that is some time off and will only drive a little bit over time. So I do not think that is the solution.

  But I do think we at the Texas Department of Transportation can play a role, as can you probably, in trying to refine, realign and inject a little more efficiency in the process. How, I do not have an answer for you.
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  Mr. SLATER. I would say that the passage of NAFTA has actually forced us to start to deal with some of these issues for the first time and I think that it would be appropriate to offer some words of commendation to Federal agencies, State agencies and local officials who have been grappling with this whole question of institutional and operational streamlining since NAFTA came on line. I will give you one example. The agreement on the part of the U.S. Customs Service to allow inspectors to move into their lots to do inspections of motor carriers. That has been very, very helpful. But it is just one example of what can be done as we continue to grapple with this issue and NAFTA is driving that, economic opportunity is driving that, time and money wasted at the border because of congestion is starting to drive that.

  I believe though that there is a role to be played at the Federal level during the reauthorization process that might allow us, Mr. Chairman, to actually incentivize the process in some way so as to make more likely certain behavior. And I think that that might be quite appropriate when you consider the national implications of some of these local decisions that continue to make inefficient the movement of goods and people across the border and thus throughout the commerce of the United States. So I think the reauthorization process allows us a great opportunity to take into account these kinds of considerations.

  I would also add that I do think that the reauthorization process gives us the opportunity to look at the possibility of some focus on reasonably identified trade corridors that have demonstrated a value on a national scale as we have focused on the movement of trade throughout the United States, as it moves from the borders through the country. And again, reauthorization gives us an opportunity to take into account those realities.

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  Mr. PETRI. Thank you very much. We are certainly open to any suggestions you or your Mexican counterparts might have for how we could facilitate that because greater efficiency benefits the publics of both our countries and they pay the ultimate bill.

  Mr. SLATER. Exactly.

  Mr. PETRI. Yes, sir?

  Mr. LANEY. Could I add one thing, please? Let me just raise a note of caution if I may about the notion of tying resolution of those issues to infrastructure development. As you all know better or at least as well as we do, the gestation for infrastructure development--the gestation period is a long time, particularly when they involve border bridges, and certainly a long time independent of any kind of cross-border issues. To slow the normal development process down with some sort of trigger or condition to the resolution of those issues would I think create enormous potential handicaps for this area of the country and certainly this area of our state. So just a note of caution, please be very, very cautious about that. I believe that those are issues that we will be able to handle very effectively at a local level.

  Mr. PETRI. There may be some way of certain incentives. We have tremendous competition, as you know, at different port crossings within Texas, so the ones that are more efficient might get the money quicker than the ones that are less efficient. There are lots of possibilities that might drive that process and take advantage of the normal competition that exists rather than just giving a little to everyone regardless of how well they are doing.

  Thank you both very much.
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  The third panel, we would like to welcome Ms. June Huber, the Assistant Commissioner for Portfolio Management of the U.S. General Services Administration and Mr. John P. Simpson, Deputy Assistant Secretary for Regulatory Tariff and Trade Enforcement of the United States Department of the Treasury.

  Welcome, and would you like to proceed, Ms. Huber?


  Ms. HUBER. Mr. Chairman, members of the Subcommittee, it is a pleasure for me to be here today to testify on behalf of the General Services Administration. My name is June Huber and I am the Assistant Commissioner for Portfolio Management for GSA's Public Buildings Service. I am responsible for the management of GSA's nationwide portfolio of real property and related assets. This includes both strategic planning, investment and decisionmaking and asset performance. U.S. border stations are a very important part of our portfolio, which also includes office buildings, courthouses and other types of Federal facilities.

  GSA's customers, unlike many other Federal agencies who serve the general public at large or provide regulatory service, our customers are other Federal agencies and other parts of the Federal Government.

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  GSA currently has 112 border stations in its portfolio with 32 on the southern border and 80 on the northern border. Of the 32 on the southern border, 26 are GSA owned and 6 are leased. These facilities are designed to accommodate the requirements of the Federal inspection agencies--the U.S. Customs Service, the Immigration and Naturalization Service and the Department of Agriculture's Animal and Plant Health Inspection Service or APHIS.

  GSA's legislative authority is to build and operate border stations. Our authority does not extend to the construction of roads, highways or bridges. These, like rail crossings or other infrastructure located outside of the border stations have to be constructed and funded by other Federal, State or local governments or private entities.

  GSA's planning process tries to ensure that the long-range space requirements of the Federal Government are satisfied in the most economic and cost-effective manner. Our plans are developed intimately with client agency participation, in this case the inspection agencies, in order to ensure that the agencies are housed in locations and facilities that maximize their efficiency and effectiveness. Our plans are also coordinated closely with state and local governments to ensure maximum compatibility with local planning goals and priorities.

  GSA, Customs, INS and APHIS work together to plan border station projects that meet the inspection agencies' requirements. The result of this planning process each year is the creation of a top ten list. Every year, GSA asks the three agencies to provide their agreed-upon and consolidated top ten priorities for our next budget and planning cycle.

  Once a project appears on the top ten list, GSA includes this project for consideration as part of its capital investment and leasing program, which is sent to Congress each year. The project remains on the list until it is submitted to Congress for authorization and funding.
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  In addition to projects that are developed through this more formal planning process, from time to time, GSA also designs and executes projects as they are authorized and funded as part of a specific Congressional initiative. One of these specific initiatives was the Southwest Border Station Capital Improvement Program which was initially authorized in fiscal year 1988. To date, a total of $353 million has been provided by Congress for this program, 48 projects have been completed along the southern border and 11 are still underway. This program has made significant improvements to border station infrastructure along the southern border, enabling our Federal inspection agencies to accomplish their missions more efficiently.

  For example, before the border program, there were a total of 130 commercial truck docks at all ports of entry along the southern border. After our program is completed, which will occur in approximately fiscal year 1999, a total of 902 truck docks will be available. As part of our planning process, we also include the capability for future growth and expansion. Current plans permit expansion of existing stations by approximately 990 additional commercial truck docks. This will allow the processing of an additional five to eight million trucks a year.

  GSA and its counterpart agency in Mexico, the Secretaria de Contraloria y Desarrollo Administrativo, have publicly stated at the Binational Conferences on Bridges and Border Crossings, that we support the maximum utilization of existing crossings prior to the construction of new ports of entry. However, we do recognize that traffic growth does not always occur precisely at the location where the Federal Government is best prepared to handle it. But more importantly from GSA's perspective, our primary role is to accommodate the requirements of our client agencies, the inspection agencies.

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  We take pride in the role that we have played in providing new and enhanced facilities along both the northern and southern borders. We recognize that trade growth and the impact of NAFTA have not yet been fully realized and that additional projects may and probably will need to be undertaken in the future to accommodate the Federal inspection agencies' requirements. As these agencies indicate to GSA that they have additional needs at the border, we will continue to accommodate the space requirements by working with them and with Congress to obtain the necessary funding and authorizations to accommodate these needs.

  Mr. Chairman and members of the Subcommittee, this concludes my testimony. Thank you for the opportunity to describe our role in this process and I will be pleased to address any questions you might have.

  Mr. PETRI. Thank you. Mr. Simpson.

  Mr. SIMPSON. Thank you, Mr. Chairman. With your permission, I would like to ask that my prepared statement be included in the record.

  Mr. PETRI. It will be made part of the record and we appreciate you summarizing the statement.

  Mr. SIMPSON. Thank you.

  The Treasury Department is very pleased to be asked to attend these hearings and I am very happy to be in Laredo this morning. I must tell you that I believe that I would have been equally happy had you held this hearing in April or October, but nonetheless, I am glad to be here.
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  I want to pick up on a theme that Administrator Slater raised and that several others have mentioned as well. We believe that government agencies on both sides of the border can help legislators make more intelligent decisions about the allocation of scarce resources for infrastructure improvement by improving and modernizing our procedures at the border.

  First, the Federal Government must become a much more efficient collector of international trade data. We have discovered that there are about 60 agencies of the U.S. government that collect and use international trade data that we collect from importers at the border. Last September 15, Vice President Gore sent a memorandum to the heads of all Federal agencies asking them to work together to create, by the end of calendar year 1998, a single Federal Government international trade data system. So essentially, we are going to take the international trade data collection systems of many Federal agencies and collapse it into a single system and we want to collect that information electronically.

  We believe by creating a common set of data and by having it in an electronic format that we can share with each other, we can reduce the cost of Federal Government information collection and substantially reduce the information collection burden on the trade community.

  Now this theory, which works at the domestic level also works at the international level as well. And therefore, the U.S. government has been working with our counterparts in Mexico and Canada to create a single set of data that can be used for both export and import purposes to satisfy the needs of customs administrations, highway safety organizations and immigration authorities.

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  The most important aspect of this system, which is called the North American Trade Automation Prototype, is that it will use the information in advance of arrival of the carrier, to make decisions using our automated risk assessment systems as to whether or not a truck needs to be stopped.

  And frankly at this point, I had a slide but I have had it copied and I would like to give it to you because I think a Subcommittee that uses an egg timer to control the time of witnesses can probably benefit from having a diagram.

  Mr. PETRI. A cartoon would be good.


  Mr. SIMPSON. Let me orient you because this is sort of a busy drawing. In the lower left-hand corner, you see the parties who provide data to this system. They provide data to the system and they also receive information back from it. In the right-hand side of the diagram is the government processing of that information. In the middle, you see ITDS Government Processing Systems. That is processing at the border, that is the information we need to make a decision as to whether we can release a truck at the border. Over to the right, you see Secondary Processing, that is collection and analysis of data by the Census Bureau, the U.S. Trade Representative's Office and by the Congressional Research Service.

  We will receive this information through the Internet primarily from the exporter and the carrier. There is a set of about 46 data items that will be standard for all three NAFTA countries. When we get the information about the cargo from the exporter, he will associate that information with what is called the load number that is unique for that shipment of cargo. The carrier will send us information about all the loads he is carrying and he will identify himself and his truck and his driver with what is called a trip number. We will have that information in advance and we will be able to put it through our automated risk assessment systems so that by the time the truck arrives at the border, we will know whether or not we have a problem with that truck from the standpoint of the goods, the truck itself and its safety record, or the driver.
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  Now when the truck approaches the border, if you look in the upper left-hand corner, we will use radio frequency identification devices, basically transponders, to tell us that this truck is approaching the Customs booth. The port system will call up the record that includes all the information previously transmitted for that truck and a screen will appear in front of the inspector that will have essentially three bars on it. It looks like the screen you see in the upper right-hand corner. There will be information about the truck itself and a red and green light; there will be information about the driver, including a front and side picture of the driver and again a red and green light; and then there will be a panel that shows red and green light for the cargo. If any one of these lights is red, the truck will be sent to inspection for more intensive inspection. No inspector may override the red light, and that protects us from corruption. On the other hand, any inspector may override a green light if for any reason he looks at the driver or the truck and thinks that there is some risk there that the automated risk assessment systems did not pick up.

  If you went down to the border yesterday, what you see when a truck arrives is that an inspector takes a sheaf of documents from the truck driver, holds them in one hand, tried to punch in the information into our risk assessment systems with the other hand and the few seconds it takes to put that information in and get a response creates congestion at the border. By processing this information in advance, we think it is potentially possible for most trucks to cross the border without stopping. I am careful about saying that because we do have a drug problem and we always want to make sure that an inspector has the latitude if he judges it best to stop a truck. But potentially we can move trucks across the border without stopping. And I think when you see that happening, you will see that we can make much better use of the resources that we have now, of the infrastructure we have now.
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  There are two other factors, if I may mention them really quickly, that could affect the need for infrastructure investment. One is that the NAFTA trucking provisions will eventually reduce the number of trucks that need to cross the border. A lot of the trucks that are crossing now are empties that are being repositioned. Once trucks can haul all the way through and pick up a load and go all the way back, the number of trucks that need to cross the border will be reduced. Now that will take time, but that will potentially reduce the demand for infrastructure improvements.

  The other thing is that railway we expect will play a much more important part in transportation across the border. The new Southern Pacific/Union Pacific Railroad is bidding to buy the Mexican National Railroad. They intend to be very aggressive and competitive in this market and I think when that happens, again, you will see factors come into play that will reduce the demand for roadways across the border.

  Thank you, Mr. Chairman.

  Mr. PETRI. Maybe the railroad will be the Christopher Columbus getting across this border.

  Mr. SIMPSON. That could be. I thought of that when you made that remark.

  Mr. PETRI. Are there any questions?

  Mr. RAHALL. Just a quick question, Mr. Chairman.
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  Mr. Simpson, you are experimenting with NATAP starting in September, is that right?

  Mr. SIMPSON. September 9, yes, sir. We will be in six locations, two on the Canadian border, four on the U.S. border with Mexico. They will not all come up at the same time. We were a little late in getting a decision from the Department of Transportation about supporting two sites in Texas, one in El Paso and then here in Laredo. My understanding though is that that commitment has been made by the Department of Transportation and we are ready to go. And I want to say that the Department of Transportation has been an immensely helpful and valuable player in putting this prototype together.

  Mr. RAHALL. Do you expect to be able to tell rather quickly, like by the end of the year, how successful it is going to be?

  Mr. SIMPSON. We are running this prototype for about 6 months and the answer is yes, we do expect to know. We believe that the system design is an intelligent design and we believe that the technology will work. Frankly, my own view is that the most important factor being tested in this prototype is the ability of government agencies and multiple governments to work together for the common benefit. That is what we are testing. And if we can do that, then I think we will have an immensely improved system at the border.

  Mr. RAHALL. Thank you.

  Mr. PETRI. Thank you both and we look forward to hearing more about it on another occasion.
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  The fourth panel is made up of Donald A. Michie, the Chairman, Transportation Committee of the Border Trade Alliance, El Paso Foreign Trade Association and the Honorable Mercurio Martinez, Jr., County Judge of Webb County, Laredo, Texas, who is appearing on behalf of the North American Superhighway I—35 Coalition.

  Gentlemen, good to see you again and welcome. We look forward to both of your presentations. As you know, your full statements, if any, will be included as a part of the record and if you could summarize your remarks, that would be great. Mr. Michie, would you care to begin?


  Mr. MICHIE. Mr. Petri, Mr. Rahall, thank you very much, members of the distinguished Committee, for inviting the participation of the Border Trade Alliance today.

  The Border Trade Alliance is a grassroots organization with representation throughout the U.S./Mexico border region from Tijuana to San Diego to Brownsville/Matamoros. We appreciate the Committee's understanding that the cross-border transportation system involves our border communities and infrastructure as an integral part of North American and the overall global transportation system. Our communities and infrastructure represent a conduit for international commerce. Our infrastructure system represents a significant cost of business for North American producers and U.S. consumers. Inefficiencies within this transportation system have a direct bearing on prices of products for U.S. consumers, and I might add that the costs of inefficiencies within this system are not borne by imports from Europe and Asia. So we have, with our inefficiencies, an erosion of our ability to compete within our own U.S. and North American market.
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  When you look at the transportation system, there are two facets to it--physical infrastructure and operations. I am going to limit my comments primarily to physical infrastructure but I would like to echo the comments of others that there would be a significantly reduced need for physical infrastructure if we were to deal with the operational inefficiencies of the cross-border transportation system. There are several issues I would like to call to your attention and suggest remedies.

  Certainly we need to take a systems approach to the cross-border transportation system for the reasons that I have indicated, and I applaud the efforts of your Committee to do that.

  Secondly, the Border Trade Alliance would like to see a separate section in the ISTEA appropriation for transportation projects of national priority. We believe that the cross-border transportation system is critical to our ability to compete and as a consequence, the existing funding mechanism is not working as effectively as we would like to see with respect to providing the funds necessary for efficiency in that system. I can give you an example--here is a report that we were asked to prepare for the Secretary of Transportation, Mr. Pená, a listing of the transportation infrastructure projects on the entire southwest border that have gone unfunded under the current system. We submit that to the Committee.

  Let me also suggest that with respect to funding, the Border Trade Alliance is adamantly opposed to user fees as a mechanism to fund this infrastructure. The reason being is that the infrastructure is part of the national system. The benefits of that infrastructure accrue primarily to the national economy. Our border communities rank among the poorest in the United States economically. We do not have the financial wherewithal to pay for this infrastructure, and let me also suggest that foreign imports, if user fees are applied, would not be paying for the infrastructure that is required.
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  We suggest the remedy for this situation is why do we not take U.S. Customs merchandise fees that are being reduced to zero under NAFTA for North American producers but still applied to European and Asian imports, and use those fees to finance North American international infrastructure for the movement of cargo and people. Why not have the Asians and the Europeans pay for those infrastructure needs.

  A serious issue that exists on the border is the lack of harmony between Federal and State regulation of foreign motor carriers. In the state of Texas, we do not even have a common definition of what is a commercial motor vehicle and as a consequence, there is a loophole. Federal law says 10,000 pounds, State of Texas says 26,000 pounds. We need to harmonize our regulatory regime if we expect to protect public safety.

  We would also like to recommend that we preserve the border commercial zone, the ICC commercial zone on the border. Not that we want to relax safety, but since more than 90 percent of the trucks coming out of Mexico do not seek access to the interior of the United States, let us honor some mechanism that enables them to operate within that zone and return to Mexico, and transship to U.S. carriers that would benefit as a result.

  A sensitive issue that exists on the border and it needs to be said, we do not have reciprocity within the border zone. Mexican motor carriers have the protection and the freedom to operate within our U.S. border communities but there is not the reciprocal right for U.S. motor carriers to operate within Mexico's frontier zone. And it is a requirement of Federal law, it is a requirement of state law, but members of the Committee, we do not enforce reciprocity and it is time that we do so.
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  With respect to public safety, no unsafe Mexican vehicle can enter the United States unless we do not enforce existing laws and so we do not need to create a complicate regime to protect public safety, we simply need to have one that is going to enforce the existing laws that are currently on the books.

  The last issue I would like to call your attention to is there has been a lot of emphasis on commercial, commerce, movement of trucks. Let me suggest that perhaps the most serious problem that we have with the movement of commerce along the border right now is the movement of non-commercial vehicles. It is not a question of infrastructure, it is a question of the infrastructure being utilized. In El Paso, Texas, it is rare for the ports of entry to be operating more than 40 to 50 percent of the primary lanes at any one point in time, despite the fact that the delay to get across the bridge is anywhere from 45 minutes to 2 hours. We are being disrespectful to the American public, we are being disrespectful to our visitors to the United States by forcing those people to sit in 130 degrees with antifreeze flowing down the bridge, trying to jockey for position to get across that facility--something has got to be done about that issue.

  Thank you.

  Mr. PETRI. Thank you. Judge Martinez.

  Judge MARTINEZ. Thank you and good morning, Chairman Petri and esteemed members of the Subcommittee. My name is Mercurio Martinez and I am the county Judge of Webb County, Texas, which includes the city of Laredo. I am also the Vice Chairman of the North American Superhighway Coalition and represent in that role literally hundreds of elected and appointed public officials and private sector supporters from the states of Texas, Oklahoma, Kansas, Missouri and Iowa.
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  The Coalition members have joined together since 1994 to seek recognition by the U.S. Congress of the critical role I—35 plays in transporting billions of dollars of truck-borne trade between the U.S., Mexico and Canada over the sole existing interstate highway passing through the heartland of the United States that links us to our North American trading partners.

  Interstate Highway 35, which begins at the mouth of the border crossing here in Laredo, represents not only one of the most important interstate highways in our county, but also accesses the largest and most critical inland port in the United States. And if I may, I am going to introduce an article from the Laredo Times that addresses some of the concerns that Congresswoman Johnson asked of our Mayor of the City of Laredo, and the commitment that was made by Benjamin Clariond, Governor of Nuevo Leon, for infrastructure that will address the fourth bridge as well as the Columbia bridge, highway accessibility on the Mexican side.

  The figures show that over 40,000 vehicles cross each day in the Port of Laredo and in particular it also considers that one standard weight U.S. truck causes as much damage to roadways as 9600 cars. So you can understand the infrastructure challenges face the communities along I—35 and in particular Laredo and Webb County.

  The above data is mainly derived from the years prior to or directly after the implementation of the North American Free Trade Agreement. The increases are projected to be even sharper as tariffs, duties and restrictions are completely phased out. For example, it is expected that in the next 12 months, an agreement between the United States and Mexico will initiate the NAFTA provision of permitted trucks from each country to travel within all Mexican and U.S. border states instead of being confined to a narrow border zone. This will greatly reduce the number of empty crossings and increase business for U.S. truckers.
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  I would like to briefly discuss the impact of the peso devaluation on I—35 traffic. For the first 2 months of 1995, the Laredo Development Foundation reported that southbound loaded truck shipments to Mexico were down by 15 percent compared to last year, while northbound loaded truck shipments from Mexico were up by 26 percent. These figures exhibit that while the peso devaluation temporarily affected the ability of Mexican companies and consumers to buy some U.S. goods, the 69,000 southbound loaded truck crossings in January and February indicate that Mexicans are still buying our products in large amounts. The increased northbound figures show that U.S. consumers are taking advantage of less expensive Mexican goods. Thus, even with the peso devaluation, total truck crossings along I—35 have reached historic highs. In fact, final 1995 U.S./Mexico trade data showed that total U.S./Mexico trade reached a record $109 billion in 1995, up by nine percent from $100 billion registered in 1994, the first full year of NAFTA implementation.

  I must emphasize that the smooth movement of goods through south Texas on I—35 not only benefits Texas in particular, but the entire country. A survey by the Laredo Development Foundation in 1989 showed that 19 percent of the trucks going southbound through Laredo carried cargo that originated in the southeast region of the United States from states such as Florida and Georgia, 38 percent originated in the northeast from states such as Pennsylvania and New Jersey and 30 percent in the central region from states like Illinois, Michigan and Wisconsin and only 12 percent of the southwest and west.

  Businesses located in Maryland did $51 million worth of export trade to Mexico in 1991 according to the figures compiled by the International Trade Administration of the U.S. Department of Commerce. Maryland's exports to Mexico grew 198 percent from 1987 to 1991, which is 109 percentage points faster than exports growth to the rest of the world.
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  Mr. Chairman, I would like to offer for the record a recent publication, ''NAFTA Trade: Past, Present and Future: A 50-State Analysis and Forecast of U.S. Exports to Mexico 1987 through 2000.''

  Mr. PETRI. Without objection, it will be made a part of the record.

  Judge MARTINEZ. Thank you, sir.

  This shows the dramatic increases in exports by Maryland during that long period, but also the exports in that period by each of the other 49 states. The hard evidence is dramatic. From 1987 to 1995, total U.S./Mexico trade rose to $109 billion from $34.9 billion. Even though this torrid pace is projected to slow in its annual growth, NAFTA Trade forecasts conservatively that total U.S./Mexico trade will grow to $224 billion by the year 2000.

  The Coalition looks forward to working with you, Chairman Petri, and the members of this Committee to make its North American superhighway system vision into a reality. The short term goals of the Coalition will require four important steps:

  1. It was our pleasure to appear before you in March of last year when Congress recognized I—35 as critical in the national highway system. Legislation passed in 1995 designated 1553 miles of this highway from Laredo, Texas to Duluth, Minnesota as a high priority corridor. But if sufficient funding to maintain and expand capacity are not allocated for I—35, congestion relief, traffic management and road maintenance of this international artery will suffer greatly. Deterioration of I—35 would mean a loss of jobs, a decline in international trade competitiveness and a resulting loss of productivity and higher transportation costs associated with increased costs of goods and services.
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  2. The Coalition asks that this Subcommittee strongly support the U.S. Treasury Department's Office of International Trade Data Systems, ITDS, North American Trade Automation Prototype, NATAP, and its fiscal year 1997 funding so that Laredo and El Paso, two critical border-crossing points for U.S./Mexico trade, can participate in this revolutionary trinational electronic pre-processing Customs program. This program will greatly ease truck cargo congestion at the major U.S./Mexico border-crossing points while greatly increasing the security and effectiveness of customs and law enforcement efforts at the international border.

  3. The Coalition also respectfully asks that this Subcommittee inquire if there is a reason the U.S. Department of Transportation has delayed for more than a year in making the financial commitments to the transportation infrastructure to deploy the NATAP program at Laredo and El Paso, despite numerous U.S. government, Congressional and public proclamations in favor of this extremely important NATAP program.

  4. Finally, we request that the Subcommittee direct the Department of Commerce and the Department of Transportation to work collaboratively with the North American Superhighway Coalition and officials along the I—35 trade corridor, to study current and projected trade data and determine the effect of increased traffic flows on I—35. We would request that this study be completely in a timely fashion, prior to your adjournment, and be delivered to your Subcommittee.

  I also want to personally thank you, Chairman Petri, and members of your Committee, and in particular Congressman Bonilla. Normally we have to go to the mountain, now the mountain has come to our community. We do appreciate your presence. We are very proud of our community and we are very happy that you did enjoy a nice, relaxed evening yesterday.
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  Congressman Bonilla, I personally want to thank you, it is through your efforts that you were influential in convincing Chairman Petri and members of this Committee to come on down. So we really appreciate your efforts as well as your interest in our community.

  Mr. BONILLA. Thank you, Judge, I appreciate that very much.

  Mr. PETRI. Thank you both for your testimony. Are there any questions?

  Mr. GEREN. Thank you, Mr. Chairman, and I want to express my appreciation to you, Mr. Chairman, and the ranking member for including a representative of the I—35 NAFTA Superhighway Coalition in this hearing. I believe this really is one of those innovative approaches to meeting some of the future demands that we are going to have to see more of--the kind of partnership that has been brought together, and Judge Martinez, you have been an outstanding leader in that effort and I commend you for what you have done.

  One of the concerns that has been discussed yesterday, and Congresswoman Johnson's question earlier, the concern is what is going on on the other side of the border to make sure that some of the things we are doing are being complemented on the other side and that we maximize the investment of our resources. Could you tell the Committee briefly about what sort of work is underway that you are a part of working with Mexican officials to ensure that what we are doing is coordinated with what they are doing and vice versa?

  Judge MARTINEZ. I will be very happy, Congressman.

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  While Mayor Ramirez was attending the conference in San Antonio, I was attending a conference on I—35 in Monterrey. And Governor Clariond, who is the Governor of the state of Nuevo Leon, at his opening address Monday morning, he personally made the announcement that he is going to set aside enough money to allocate for the construction of a highway that will tie in with the Riberenía Highway, which the fourth bridge will tie into this Riberenía Highway and in turn this Riberenía Highway will have the proper--will be properly addressed in construction to connect with the Columbia bridge. The observation that he has made was that the Columbia Bridge--and this is very much a fact--is one bridge that has the best of infrastructure; however, because of its accessibility it has not had the great use that it was originally intended for. Now with the commitment of Governor Clariond in providing the accessibility through the construction of a highway, which by the way he said that the bids already have been posted, and it is very possible that those bids will be closed by the end of this year. We are hoping construction will start the beginning of next year. Once this is finished, Congressman, then we will have far greater use of the Columbia Bridge as well as the proposed fourth bridge for the City of Laredo.

  Mr. GEREN. I know that the Coalition has had meetings in all the states that would fall along the extension of the I—35 corridor as well as meetings in Mexico City with our Ambassador and other officials down there.

  Judge MARTINEZ. Yes, sir.

  Mr. GEREN. I appreciate it. Thank you, Mr. Chairman.

  Mr. PETRI. Thank you. Are there other questions?
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  [No response.]

  Mr. PETRI. I would just be curious, you evidently, Judge Martinez, have been working quite cooperatively with your colleagues south of the river and are in frequent communication.

  Judge MARTINEZ. Yes.

  Mr. PETRI. Does the I—35 Coalition--include members from the Republic of Mexico?

  Judge MARTINEZ. Yes, sir. As a matter of fact, we have had excellent representation from representatives not only within local communities but also the individual states where the Pan American Highway goes through, the individual governors as well as the Mexican Federal Government officials. We have met with Herminio Blanco, we have met with Victor Geraldo Wolski, people in key government positions that have gotten the support of our interest. We have also met with the major groupos in Mexico that also have shown interest and commitment for the improvement of this particular highway, Mr. Chairman. Among the groupos are Grupo GUTSA, Grupo ICA, Grupo VISA, they are key people that actually have concessions within the toll roads all over Mexico. So this is the kind of groups or individuals that we have gotten commitments with our I—35 and we have done a considerable amount of legwork along these lines, Mr. Chairman.

  Mr. PETRI. It is clear those kinds of relationships are going to be very important as we work to accommodate increased traffic across the border and do various things to speed the movement of goods through the border moving north into the United States in meeting our concerns about drugs things. The same thing for concerns that the people in Mexico or the Mexican government might have for various articles moving south.
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  Judge MARTINEZ. Yes, sir.

  Mr. PETRI. Thank you both very much for your testimony, good to see you again and we look forward to continuing to work with you.

  Judge MARTINEZ. Thank you very much for your interest.

  Mr. PETRI. The fifth panel consists of the Honorable Dan Morales, Attorney General of the State of Texas, who has submitted a written statement but I understand was unable to end up being here at this time. If there is a representative from his office, that person would be welcome to join the panel. Colonel Dudley Thomas, the Assistant Director of the Texas Department of Public Safety; Mr. John Riojas, International Vice President of the International Brotherhood of Teamsters, Mr. José Maria Casanova, the General Secretary of the Union de Operadores de Sonora and Mr. Jerry Prestridge, Executive Director of the Texas Bus Association and K. Michael O'Connell, Counsel, Owner-Operator Independent Drivers Association, Inc. accompanied by Charles Holman, Owner-Operator Independent Drivers Association, Inc., member of the Board of Directors for the State of Texas.

  Let me see, Colonel Thomas, would you like to start?

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  Colonel THOMAS. Thank you, Mr. Chairman. My name is Dudley Thomas, I am the Assistant Director of the Texas Department of Public Safety. I appreciate the opportunity to be here today to address this Committee.

  Texas has 1260 miles of border with Mexico and along that border there are 22 crossings that accommodate commercial motor vehicles. Six have been identified as major border crossings. Those are Brownsville, El Paso Bridge of Americas, El Paso Ysleta, Hildalgo, Laredo Bridge II and Laredo Columbia.

  Texas has the following concerns associated with NAFTA. I think first and most important as you have heard today, that government is reactive and not proactive to concerns. We wait until a problem exists, then we react to that problem. That is true at the Federal level, true at the state level, true at the local level, and that is a major concern.

  Another major concern we have is the already rapid growth that we are experiencing in Texas. We are the second most populous state in the nation with a population of about 18.4 million people. We are growing by a rate of about 18,000 people per month in our state. We have 14.5 million registered vehicles, 294,000 miles of highway, 13.8 million licensed drivers and motorists drove 183 billion miles on our streets and highways last year in our state.

  We have limited state resources. We are authorized 1703 highway patrol personnel, we are authorized 332 of our License Weight Service people who are primarily charged with enforcement of the Federal and State regulations concerning size and weight in our state. In our Highway Patrol Service we have one trooper for every 126 miles of rural highway and that is for an 8-hour shift, that is not 24 hours a day.
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  Our routine workload in 1995, the Highway Patrol Service made 1.3 million traffic contacts, made 21,000 criminal arrests and investigated 45,000 traffic accidents. Our License Weight Service made 253,000 traffic contacts and placed 16,000 vehicles out of service. Currently, statewide about 35 percent of the vehicles that are inspected by our License Weight Service are placed out of service for violations versus about 50 percent at the border check stations.

  To demonstrate the problem that we experience at the border check stations, in Brownsville in the period of time from June 2 through June 15, 1996, 5183 vehicles crossed through the port of entry. We were able to check 248 of those vehicles, conduct inspections on 94 of those vehicles and placed 78 of the 94 out of service, that is 83 percent of the vehicles that we looked at had safety concerns to the extent that they should not operate on our streets and highways. We weighed 101 of those vehicles and issued 24 weight citations. Those weights run from 100,000 to 200,000 pounds as a matter of routine for the vehicles that cross there. We only inspected 1.8 percent of the vehicles that came across during that time period, which is a very low, unacceptable number.

  Another fact that we face is that Texas is among the top ten in fatal accidents involving commercial motor vehicles at the present time. The U.S. Department of Public Safety on two separate occasions has stated that 75 percent of the long haul cross country truck traffic generated in this country comes through some portion of Texas and that is a major concern for us.

  Another major concern that we have is drug trafficking in our state. General McCafferty was down recently with Administrator Tom Constantine and they both stated that 60 percent of the drugs that enter the United States come across the border between Texas and Mexico, a tremendous concern. Recently a truck loaded with bricks out of Mexico was stopped up in the Waxahachie area near Dallas, had 450 pounds of marijuana hidden in the bricks. More recently, a truck loaded with onions out of Eagle Pass had 5800 pounds of marijuana covered with the onions. It is a problem, it is an ongoing problem and in recent newspaper articles, the U.S. Customs Service and the Drug Enforcement Administration are both saying that NAFTA will cause more of these incidences of drugs being transported in large commercial motor vehicles.
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  Another concern of ours about NAFTA is the lack of real support from the Federal Government. What we need from the Federal Government is enforcement funds directed to the border, for the Department of Public Safety and the Federal Department of Transportation, dedicated funds for those check stations.

  Another thing that we need from the Federal Government has been addressed two or three times, and that is adequate inspection facilities at the Customs lots. At the present time in most of those lots, there is not room for us to adequately perform our functions while Customs and other agencies perform theirs. We need larger and better facilities there.

  We need a commitment from Mexico to improve their trucks and their truck traffic prior to being allowed to be a part of NAFTA and a part of the Free Trade Agreement, their trucks should be required to come up to standards in Mexico to meet the American standards.

  The Department of Public Safety has committed manpower allocations along the border. In the last legislative session, which we are about to enter the second year of the biennium of that session, we were able to obtain 85 additional License Weight troopers for NAFTA and we have placed 20 of those along the border at the critical points. As a matter of fact, 22 of those are being placed at those locations. Our current budget request is for 127 additional officers and those would be stationed at the six major border crossings that have already been mentioned--dedicated.

  Our goal at DPS is a long-range goal and that is to achieve significant compliance with size, weight and safety regulations by trucks entering the U.S. from Mexico as well as those who routinely use our state's highways. We hope to have a side effect of deterring drug traffic at the same time.
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  Again, I thank you for the opportunity to be here today and testify.

  Mr. PETRI. Mr. Riojas.

  Mr. RIOJAS. Thank you, Mr. Chairman. My name is John Riojas, I am an International Vice President of the Teamsters Union and a member of Local 657 in my hometown of San Antonio. On behalf of our 1.4 million members, I want to thank the Subcommittee for giving us the opportunity to testify.

  To fully understand the enormous impact of NAFTA's trucking provisions, we need to look at them from the perspective of anyone driving on U.S. highways. Imagine if one out of every two trucks you passed on the road did not meet U.S. highway safety standards. Imagine if one out of every five of those trucks was driven by a driver who did not meet U.S. commercial drivers license standards. According to recent statistics released by the Department of Transportation, this is the average scenario for Mexican trucks crossing into the United States.

  Here in Laredo alone, 51 percent of all Mexican trucks inspected are put out of service--twice the national average for U.S. trucks. Over 18 percent of all Mexican drivers are put out of service--three times the national average of U.S. drivers.

  Despite the best efforts of public safety officials in Texas and all of the border states, the record is crystal clear. NAFTA's trucking provisions pose a severe threat to public safety. They also threaten the physical infrastructure of our national highway system.

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  What can we do to reverse the situation? A quick look at NAFTA's trucking provisions shows that the band-aid solutions do not work.

  In general, the negotiators of NAFTA's trucking provisions failed to recognize the economic and regulatory differences between our two countries. As a result, unreasonable and unrealistic provisions were negotiated.

  The biggest single mistake made by NAFTA's negotiators was the assumption that Mexican trucks would meet our safety standards when operating in the United States. Mexican highway safety standards and enforcement programs, then and now, are weaker than those in the United States. Simply put, Mexican trucks and truck drivers do not have to meet U.S. highway safety standards while driving in Mexico. Consequently, they cannot be expected to miraculously do so when operating in the United States. Border enforcement personnel cannot waive magic wands and turn an overweight, 20 year old, uninsured tractor-trailer with no front brakes into a late model tractor-trailer that meets U.S. safety standards.

  NAFTA's trucking provisions also fail to acknowledge the major difference between the economies of the United States and Mexico. We have spent considerable time in the last year building relationships with Mexican trucking organizations. Mexican truck operators, most of whom barely make ends meet, recognize the difference in highway safety standards and enforcement programs between the two countries. They want Mexican standards to improve and they want to improve the quality of their trucks. But the low wages in Mexico and the extremely high interest rates make it impossible for them to do so.

  Last December, President Clinton delayed the expansion of NAFTA's trucking provisions. The President recognized that neither the safety standards nor the enforcement programs were in place to guarantee public safety. The Teamsters Union strongly believes that a number of steps should be taken before this delay is lifted. We have outlined these steps in our written testimony. For the sake of time, I will just highlight two of them.
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  First, the Transportation and Infrastructure Committee and the full Congress should pass a resolution calling on the Clinton administration to renegotiate NAFTA's trucking provisions. Until we return to the table, millions of Federal dollars will be wasted trying to enforce a bad deal that cannot be enforced no matter how many safety inspectors we assign at the border area.

  Second, the Transportation and Infrastructure Committee should conduct hearings on the Department of Transportation's failure to disclose the lack of a comprehensive plan for enforcing U.S. highway safety standards. It defies common sense that we would even consider opening the borders without such a plan in place.

  In closing, some will argue that what I have recommended will erect barriers to trade. The opposite is true. Strong highway safety simply guarantees the fair trade necessary to protect the well-being of all citizens. There are also those in the trucking industry that will argue that renegotiating will upset their plans and cost them money. Let me be clear that the Teamsters Union is committed to preserving the financial health of the trucking industry, but not at the expense of public safety. A death or injury on the highway that could have been prevented is too high a cost to pay so that the trucking industry can enjoy a momentary increase in profits.

  Besides, renegotiating NAFTA will not slow trade down. For years, Mexican trucks have left their loads at the border where U.S. drivers pick them up. The system should continue. It is time to promote highway safety, not just the interests of the trucking industry.

  If each of us in this room were honest with each other, we would admit that there is already a highway safety problem in the United States. Too many truckers are being pushed to the limit by trucking companies who put profits before people and safety. Too many truckers must drive long hours at high speeds just to make ends meet. Until we improve conditions for those drivers and improve current Federal enforcement efforts, the threat to highway safety will continue.
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  In this light, it makes no sense to further jeopardize public safety by rushing to implement NAFTA's trucking provisions. Let us take the time to do it right.

  Again, we appreciate the opportunity to testify before the Committee and I will gladly answer any questions at the appropriate time.

  Mr. PETRI. Thank you. We appreciate your testimony and the thought that went into it and the full statement will be made a part of the record.

  Mr. Casanova.

  Mr. CASANOVA. To the Committee of the House of Representatives, I am very thankful to have the opportunity to be here. I appreciate the opportunity that you have given us to participate in these efforts to look for a solution to this problem.

  I would like to start by saying the Fair Trade Agreement that was signed by the governments of Mexico, the United States and Canada has generated great controversy, especially with what we refer to as trucking.

  As Mexican truck drivers in the Truck Drivers Union of Sonora A.C., we clearly, honestly and respectfully submit our views.

  Right now Mexico and the Mexican people find ourselves in a process of economic recovery, after the negative impact, which we economically resent, in December 1994, an event that substantially changed the optimistic prospects that came out of the signing of NAFTA, specifically in the area of trucking.
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  As we are a developing country, these circumstances put us at an even greater disadvantage. Even so, we would like to believe that the Free Trade Agreement could bring benefits to the trucking industry in Mexico, but we should look for approaches or intermediary steps that would allow us to get to a trade agreement that is better fitted to our economy.

  The opinion that we have formed as a result of our experience as truck drivers operating in the field is that the operators do not have the standards of safety that the United States has and this is a very disadvantageous situation for us, and sufficient reason to think that the solution of NAFTA consists in taking these factors together--form and time.

  The mode of operation should be a ''work to the border'' arrangement where trailers are exchanged at the border with their respective cargo. This will allow the sharing of technology and labor and entrepreneurial skills, in addition to setting the economic foundations that will allow us to define the time when we will be ready to compete with trucking in the U.S. and Canada.

  It is necessary to make clear that we know that competition is good, but only when the conditions are equal and I believe that is not the situation with Mexico with respect to its two trade partners.

  I would like to say thank you to the Congress to permit us to be here and hope our opinion will be positive to look for the solutions that we need with the United States, Canada and Mexico.

  Mr. PETRI. Thank you for your testimony. Mr. Prestridge.
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  Mr. PRESTRIDGE. Thank you, Mr. Chairman. My name is Jerry Prestridge and I am Executive Director of the Texas Bus Association. I ask that my testimony be submitted for the record.

  Mr. PETRI. Yes, sir.

  Mr. PRESTRIDGE. The testimony is really summarized on page 2 of the statement and I will just briefly outline those points.

  Effective January 1, 1997 under NAFTA, there will be allowed cross-border bus transportation in scheduled bus service, international service. Ongoing negotiations that are being conducted now, the bus industry at least in Texas and I think also I speak for ABA as far as scheduled passenger carriers are concerned, hope and desire those negotiations result in quality of operations. That is, that U.S. bus carriers be allowed to enter the Mexico market just as the Mexican bus carriers will be allowed to enter the U.S. market--reciprocity really is what I am talking about.

  As you have heard today, there is a tremendous amount of emphasis on truck safety, truck inspections and with the increase in passenger transportation, cross-border, we ask that USDOT and state officials, Department of Public Safety, increase and enhance the enforcement of the Federal highway safety regulations with respect to the passenger operations, bus operations, cross-border operations.

  There is one very serious problem that we see in connection with the lack of regulation of what we call here as comionetas, I think a translation of that is delivery van. These 15-passenger vans, for the most part, are operating without any particular safety regulations today, although in December, Congress redefined commercial motor vehicle to be or to include any commercial for-hire vehicle transporting six passengers or more, excluding taxicabs. We would like for USDOT to again enforce the safety regulations to the extent they can on those van operators.
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  NAFTA prohibits point to point service by a foreign bus carrier in the United States and as carriers are prohibited from providing point to point service in Mexico. We want to ask that DOT put emphasis on the fact that prohibition on NAFTA is all-inclusive and prohibits transporting passengers, for example, from Laredo to Dallas. We think they will, but we just ask that for emphasis.

  With that, I will conclude my comments. I do have one correction on page 7 of my statement, the fifth line up from the bottom toward the end of the sentence, the word ''industry'' should be inserted after ''bus.''

  Mr. PETRI. That will be made a part of the record. Thank you very much for your summary. Mr. O'Connell.

  Mr. O'CONNELL. Thank you, Mr. Chairman, members of the Committee. My name is Michael O'Connell and I am counsel to the Owner-Operator Independent Drivers Association, which is the national trade association representing small business truckers.

  OOIDA is located in Grain Valley, Missouri and I am accompanied today by one of its Board members who is a resident of the state of Texas, Charles Holman. Mr. Holman has been a trucker in Texas for 40 years and has been engaged in cross-border operations for the last ten of those 40 years, and serves on our Board of Directors.

  I would like to just state the Association's position and then allow him to make a comment or two on the experiences that he has had in cross-border traffic and then allow the Committee to ask any questions that they might have of someone who is actually engaged in that operation.
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  OOIDA does not oppose free trade, it does oppose the opening of the borders at this time. We believe the Department of Transportation was correct in stalling that and we believe that that should continue.

  What we have talked about today, actually a good portion of my testimony was taken by Colonel Thomas, who verified in terms that I cannot because we do not have the hands-on experience, the woeful problem that we have with simply trusting that this is a problem that we can enforce our way out of. This is a systems problem that we have, because we have identified six areas, the first of which was also hit on by Mr. Thomas, and that is the transshipment of drugs out of northern Mexico. There was recently, in a Sunday Washington Post, there was a large article about how there was a town that was devastated in northern Mexico that was using small planes to fly drugs into Texas, and they started buying larger planes to fly those drugs in and actually moved the air facility further back into Mexico because they were flying 727s. That article noted in the interviews of the people in Mexico that were shipping the drugs--I do not know how the reporter got the interviews--but that they were specifically looking forward to opening the borders of the United States so that they could ship these drugs into the United States in trucks.

  Until we have an effective program on both sides of the border to stop that, we have a concern with that. That is independent of our concern with highway safety.

  On the highway safety side, the average age of Mexican equipment is 15 years old versus 5 years old in the United States. So to start with, the equipment is not in as good shape, and it does not have the systems--trucking has changed radically in the last 10 years.

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  Second, there is no equivalent to the U.S. drivers license program, U.S. commercial drivers license program, in Mexico. There is not really an effective truck inspection program in Mexico and there is no centralized way of tracking down problematic carriers in Mexico, as we have in the United States. Our Canadian trading partners have those systems in place and it makes sense to be engaged in that trade on a fair basis with them. Until those systems are put in place--not an enforcement issue but a systems issue--until those systems are put in place, we can put all the inspectors on the border that we want and we are not going to achieve fair trade with Mexico and a safe condition on the U.S. highway.

  The implication of Colonel Thomas' statement is that 1.8 percent of the trucks were inspected, 98 percent of them were not, that were coming across. And that is at what I would assume is a fairly heightened inspection activity here. He cannot put that many inspectors on the border. We would be talking about--and once we did, what would we do, tie the trucks up at impound lots and create a huge mess where you could not move cargo? The recent problem that has occurred on the border with the ''crackdown'' on Mexican trucks coming into the United States led to all sorts of disruptions.

  What we need to fix are the systems in Mexico before we can have a fair trade.

  The rest of our comments are submitted in writing. I did not touch on the compensation issues, I do not think that those are real concerns because once we have brought the Mexican trucking industry up to U.S. standards so that we can have fair trade, we believe that those will take care of themselves.

  Thank you.
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  Mr. PETRI. Mr. Holman.

  Mr. HOLMAN. Mr. Chairman and Committee, you know, I am kind of like Minnie Pearl, I am just so proud to be here. I just cannot say it like she can.

  Mr. PETRI. Well, howdy.

  Mr. HOLMAN. Besides that, I do not have a tag on my hat.

  I just want to make some comments here. I have hauled livestock from Eagle Pass to Mexico City; also from Del Rio to Mexico City. I will tell you what, you get down there in that country in trucking and see those trucks and those drivers down there, I want to take a wild guess that probably 10 percent of those trucks are very good trucks. The others are, a lot of them are junk. In fact, I have got two trucks running down there that I sold them boogers that I could not get down the highways here, the Colonel's men would be out there after me with them. In fact, he would probably throw me in jail with them.

  But anyway, they have the majority of the trucks that we have worn out and sent down there because of their economic situation down there. And those drivers, some of them are pretty rough drivers, you know. They do not yield like we do up here on our highways. If you meet a truck down there and you see his headlights on in the daytime, you had better back off because he is coming on, he has done told you he is coming.

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  Mr. HOLMAN. And if you do not, he is going to push you out.

  We need to be sure that those trucks down there have undergone the same inspections we do up here before they come over here. You know, I do not want to meet a truck on the highway and the ball joint falls off of it and the wheels fall out and I run over the wheels. We want to be sure that those drivers are drug free, we want to be sure that those drivers understand our laws, our rules, our safety regulations.

  You know, I have got grandkids out there, I have got sons and daughters and daughter-in-laws and all of you all have them just like I do. And by golly, I would like to go home once in awhile and see them and I want to see them alive.

  I worked across this border there from Del Rio for several years. In the last 3 to 4 years I have not been crossing, but I would go from the cattle export pens of Mexico and bring cattle into the United States and go on into the Texas panhandle and further north if necessary. A lot of those trucks that are coming out of there that I have seen are just shuttling across more than anything, there are not any of them that I have seen going on north, but those trucks are trucks that--well, I have got one that I use when I tear out my railroad--you know, now and then I do kind of a trucker's dream and help tear out railroads, but I have got one that I operate out there on the railroad, run up and down the right-of-way out there. And that thing, I would not drive it across the county on a county road, much less on the highway. I see a lot of trucks down there crossing that Mexican border that are just like that one.

  We just need to be sure that those truck owners, the drivers, everybody understands and knows that piece of equipment is going to be safe when it comes here and that driver is going to be a safe driver and drug free.
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  If you have got any questions, I will try to answer them and I hope I have been a help to you.

  Mr. PETRI. Thank you. Thank you all for your testimony. Are there any questions for this panel?

  [No response.]

  Mr. PETRI. I have one to kick things off.

  You talked about a lot of the different safety issues, particularly the difference in equipment and certification and all that sort of thing, south of the border. I guess my question is do you have any suggestions about how we get from where we are to where I think we probably are headed, or NAFTA contemplates us heading, which is to be able to have more common standards and easier movement of goods across the border. Would some sort of North American certification that would be required of Canada, the United States and Mexican drivers and equipment to be able to go across the border plus a quota system so that Mexico was not overwhelmed be workable? Would this help Mexico in particular move from where they are to where I think they probably want to be? Would this be more productive than saying you have to be perfect before you can do anything. Do you have any suggestions on how we could do that or is that an impossible thing? Yes, sir.

  Mr. RIOJAS. Whatever the solution is, it is not something that is going to occur in a very short period of time. It is something that is going to occur over I think about 5, 10, 15 years, it is going to be something that happens gradually because you just cannot realistically expect Mexico to just overnight, you know, adhere to the same rules and regulations that we do in this country. It is going to take time for everything to happen. So if you are looking for a short-term answer, there is none, I do not think. And I think that is one of the problems with this particular NAFTA, and that is that it expects things to happen--you know, even though there is a timetable, it really places a lot of unrealistic expectations on the Mexican trucking industry.
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  Mr. PETRI. Mr. Casanova, did you have a comment?

  Mr. CASANOVA. With respect to what Mr. Holman said, I agree with his point of view. In Mexico, the activity of the commercial vehicles has been bad for the truck driver, based on the economy that we have in our country. So obviously the Mexican carriers have had to find people to drive the trucks. We have found people who are not professional drivers. We do have some very professional Mexican drivers and I would like to reiterate this, that the activity that they had was just not providing enough yield on the investment. They could not live on the salaries. That has provoked the decrease in professionalism of the drivers and this has also provoked the problems that they have--the low salaries.

  The solution that we have proposed and what I mention now is that this work on the frontier, some companies are already working with American companies who have alliances, not societies but alliances, and the American companies load in the United States and they go into our country, Mexico, and they just simply change trailers on the border. There is no problem. This would be a simple solution. The tractors could continue to work on both sides of the border. The tractors, because of the way they are made, they are made to take heavy cargoes, they are very heavy, they are very excessively heavy. They are made of steel, it is all heavy. So to remodel all of this, Mexico would be talking about something that is impossible right now perhaps. The economic situation is not very favorable with inflation, but the 60 or 70 percent of vehicles that work on the border generate work. All carriers will begin to have economic benefits and resources to change the vehicles, but the economic situation at present will not permit us to do this. We do want to comply with the parameters and the agreements we come to.

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  Mr. PETRI. Anyone else? Yes.

  Mr. O'CONNELL. I think--just briefly--I think it is important that the systems be in place in Mexico prior to operating in the United States and then I think once those systems are put in place, there will be a competition among the Mexican carriers to adhere to those and those that are adhering and can demonstrably meet U.S. safety standards should be allowed into the country first and should be operating in the United States.

  But when we asked if there was a way to get it moving, we would never exempt a U.S. carrier from the CDL requirements that we have in the United States. I would not represent a client before this Committee asking for that, and we should not exempt Mexican carriers. We would not exempt a U.S. carrier that had a bad safety record. We do not even know what the safety records are of the Mexican carriers. And until we can establish those points, I do not think we can realistically allow cross-border traffic with Mexican trucks coming into the United States. Once the systems are there, I think the cream will rise to the top and there will be companies that want to enter the U.S. market and that will get their trucks in compliance very quickly and we can certify that and then we have no objection to their operation, just as we do now with Canada.

  Colonel THOMAS. Mr. Chairman, just to answer your question about another level of bureaucracy--no, sir, we do not need one. The Federal Office of Motor Carriers working with the various states that do commercial vehicle enforcement, established an organization called the Commercial Vehicle Safety Alliance. That organization is made up of the trucking industry, it is made up of the manufacturers, drivers, associations, represented well by state agencies that do commercial vehicle enforcement.
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  That group established minimum safety standards for commercial vehicles and drivers. Those have been adopted nationwide and Mexico itself has adopted those Federal commercial vehicle safety standards. We, the Texas Department of Public Safety, along with the U.S. Department of Transportation have made numerous trips into Mexico to train drivers, to train mechanics, to train owner-operators and to train the industry on what those standards are, how to do the inspection, the standard DOT inspection, to put a decal on those vehicles to authorize them to operate in the states. We are moving in that direction, but again, this is reactive, it was not proactive. I do not think that at the time that NAFTA was being considered and adopted that any of us had any concept of the size of the problem and the type and the condition of those trucks over there. We are just behind the eight-ball and we have got to play catch-up, quite truthfully.

  Mr. PETRI. Further questions?

  Mr. GEREN. Mr. Chairman, I would like to make a comment and then perhaps ask for comments from the panel. We are looking at this situation as if we are going to be locked in time at the moment this cross-border traffic takes place. In the world of just-in-time manufacturing I would think south of the border, as north of the border, there will be a premium on well-trained drivers, trucks that do not break down, trucks that are not turned back at the border, trucks that have that sort of computer tracking equipment that many of our trucks have. And I would expect that the competition from American carriers would rapidly change the trucking industry in Mexico. If I were a manufacturer in Mexico and I had products that I knew needed to be at San Antonio at 2:00 in the afternoon on a certain date, I would want to make sure I hired a truck that was not going to get stopped at the border, have a truck that did not break down, a well-trained driver of the level that the Teamsters Union provides for our nation's trucking industry. And I think that we have to bear in mind that the world will not stand still and these trucks that are not reliable are going to get pushed out of business ultimately.
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  I know I have talked with some of the trucking companies in my part of the state, many of whom are represented--the drivers are represented by Teamsters--they see this Mexican market as a tremendous opportunity. They expect that they will take a whole bunch of that trucking market coming back into the United States from current Mexican trucking operations because they can guarantee that they can meet the demands of just-in-time manufacturing.

  So I think some of this can be done by additional regulation and changing the systems, but I think that we have to bear in mind that one of the things that will change the system more than anything else is having these excellent drivers, excellent trucks, computerized trucking systems from the United States going down there and competing, and it will radically change the trucking industry in Mexico. Until that happens, you are probably not going to get the kind of transformation of the trucking industry that we would all like to see. All the dictates in the world coming from the government down there are not going to accomplish some of those purposes that the competition from this excellent well-trained American trucking industry would bring to bear.

  Thank you, Mr. Chairman.

  Mr. PETRI. Thank you. Any reactions?

  Mr. RIOJAS. Well, I would be remiss if I did not say anything. Certainly we concur with your vision that the Teamsters do provide excellent drivers----

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  Mr. RIOJAS. However, you know, any time you are dealing with companies there is always going to be certain companies that will put the almighty dollar before safety. And I suspect that even though you are right, good American truck drivers going into Mexico--which is by the way, José's concern, is that, you know, American truck drivers are going to go into Mexico and take our jobs away.

  But even with that, there is always going to be traffic coming this way, there is always going to be American companies that are willing to take the gamble for the almighty dollar to save money and bring in, you know, any kind of truck that can come across at a cheaper price. And what we have right now--and I think the main emphasis that we have to look at is the fact that only two percent of the trucks that are coming across the border from Mexico are being inspected--2 percent. I mean, we have had the Department of Transportation say that, you have had DPS say that. Two percent of the trucks--that means that 98 percent of the trucks that come across that border on a daily basis are not being inspected. Now out of the two percent that are being inspected, almost 50 percent are being pulled out of service for some kind of safety concern. Now what does that tell you? That tells you that there is an influx of unsafe trucks coming into the United States. Right now, it is primarily along the border. What happens when the highways are opened up and they are able to travel throughout the interstates? Not only do they pose a safety hazard to the general public--and let me tell you something, our Teamster members are part of that public, we drive up and down those highways, we consider those interstates our workplace. And that is why the Teamsters Union is so adamant about this. I mean, it is not because--I know there are people that are out there saying that Teamsters are against NAFTA. We are not against trade, we are not against trade with Mexico or any other country. But we want it to be done in a fair and equitable way.
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  Any time you put a--think about what we have done, think about what this administration has done. We have increased the speed limit in this country over just the last couple of years, we have increased the speed limit. So now we are talking about bringing in more trucks, more unsafe trucks into this country. We have got more unsafe trucks, we have got higher speeds. Where does it all end? That is all I have really got to say.

  Mr. PETRI. Any other--yes, sir, Mr. Holman.

  Mr. HOLMAN. I would like to make a point here, you know, talking about the complication from our truckers going down yonder forcing those people, trucking companies down there, to come into compliance. Well, I have got a problem with that, for the reason why is that, you know, being an owner-operator trucker myself, I am not out there to put anybody else out of business, you know, I am out there to make my own living the best way I can.

  I feel like that that is a negative attitude, is making--in other words, we will put those truckers down there out of business if we go to putting our fancy rigs down there, you know. From a personal standpoint, and I believe that my association will stand behind me, we do not want to put those truckers out of business down there. We just want somehow to educate them and get them to where they can bring those trucks up to our standards before they come into this country.

  I do not really have any answer as to how to do that outside of enforcement at these borders. And of course, the Colonel can tell you himself, he is really overpowered, he needs his men somewhere else, you know.

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  That is all I have to say.

  Mr. PETRI. Thank you.

  Mr. CASANOVA. I think that I support and have the same opinion that my friends and Mr. Holman have. It is something I too have been saying related to the North American trucks that compete in Mexico. They do not come down to compete, they are occupying the space of 95 percent of the transport sector. And I would like to insist that the economy in our country, it is very important. We cannot make mistakes. We do not have the--North America has to compete with Mexico and the social problem that we have in Mexico. There is a large index of people, including my friends, who have lost their lives. There is, in fact, more hunger because of the displacement by your good trucks. Some of the Mexican people will not come on this side because of the cost to meet the standards.

  Mr. PETRI. Thank you. Other questions?

  [No response.]

  Mr. PETRI. If not, thank you all very much for your enlightening testimony and we appreciate the effort that went into preparing your prepared remarks.

  We have one more panel and we have been sitting here for quite awhile, so I think what we will do is recess and recommence at 1:15. The Subcommittee is in recess.

  [Whereupon, at 12:11 p.m., the Subcommittee recessed, to reconvene at 1:15 p.m., the same day.]
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  Mr. PETRI. The Subcommittee will come to order.

  We are honored by the presence of the President and the Chief Executive Officer of the American Trucking Association, Mr. Thomas J. Donohue, who has also been an international leader, at least in helping to organize and sustain the North American Transportation Alliance, a group that encompasses not just trucking, but various other transportation modes, to try to work on helping the movement of goods across the whole North American continent.

  Sir, thank you very much for coming so far and we look forward to your testimony.


  Mr. DONOHUE. Thank you very much. I will behave like a trucker and speak with great voice.

  Mr. Chairman, members of the Committee, thank you very much for inviting me today. I appreciate that Chairman Shuster and the gentlemen gathered here today, Mr. Rahall, Mr. Petri, have worked very hard on this subject and taken a lot of time to bring their colleagues together, and I am pleased to come down and share a few thoughts with you.

  The trucking industry, as you know, has long supported NAFTA. We believe it is good for our economy, good for our citizens and good for trucking. According to the Commerce Department, 2.4 million American workers depend on U.S. exports to Canada and Mexico for their jobs. If that is the case, that is a very good message because in the last year, we have seen a 16 percent increase in the amount of trade between the United States and Mexico and that is growing at a rate that is very difficult to calculate, considering what has been going on with the peso and the other problems of the border not being open.
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  So NAFTA offers the promise of even more jobs. It establishes the framework for increased trade and the vast majority of those moves, I am very happy to say, will be on trucks. That is why in 1994, ATA joined with its counterparts in Mexico and Canada to form the North American Transportation Alliance, and the Alliance has been working aggressively with all three NAFTA countries, private sector, public sector, transportation modes of all type to advance this relationship.

  As you might expect, Mr. Chairman, the trucking industry adamantly opposes the administration's last minute decision to delay the key provision of the agreement which would have allowed us to cross the border. Opening the border was an important step in turning the promise of NAFTA, more trade, more jobs, more growth, into a reality.

  U.S. shippers and carriers engaged in NAFTA trade have been particularly hurt by this political decision. Equipment orders have been postponed, contracts have been put off or canceled and the promise of increased operating efficiencies have been indefinitely delayed. Moreover and very important, key U.S. trucking concerns in Mexico are not being addressed--the 53-foot trailer issue, small package problems with UPS and Federal Express and U.S. investments have been put off as our government continues to negotiate about when and how to meet its primary obligations.

  But despite all of that, despite all of the inconveniences and despite the question of good will, we have had a 16.8 percent increase in exports to Mexico over the last year. If we fully implement NAFTA, we will see a tremendous improvement and expansion of that. Therefore, Mr. Chairman, finding a fast solution to the border freeze is a very important priority for all of us.

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  Now I would like to say a word about safety. Beyond the immediate adverse impact on shippers and carriers, the decision to close the border struck a blow at America's credibility in the eyes of the world. You cannot make agreements and then break them. You can sort of wiggle around the edge, as we have always done--delay a week, do something--but an absolute violation of the agreement is not good politics. Why would the administration risk its credibility when it had fought so courageously to pass the legislation? Well, to the safety issue because they used that for the argument. Mexican carriers are currently operating safely in the commercial zones in the United States border states and they have been doing so for 20 years. Within a stone's throw of this building, 4800 trucks will cross the border into the United States today and tomorrow and the next day, and most of them will be found in good repair. They belong to the Commercial Vehicle Safety Alliance, they are regularly inspected. Are they in as good repair as the long-haul trucks running up and down in Mexico and the United States? Probably not. We are working hard on that.

  U.S. enforcement officials have gone on record in saying they are fully prepared to assure safety. The border state governors indicated that from the outset, and just recently in a letter to President Clinton, that they are ready for safe operations and every single Mexican carrier operating under NAFTA's new grant of access must meet all the U.S. safety regulations.

  In addition, we have implemented regulations requiring substance abuse testing for foreign-based drivers beginning in July of this year. Truckers in Mexico are rightly offended by the assertion that they cannot and will not comply with U.S. law, because they have not even been given a fair chance to do so.

  Now on the other hand, if I might just digress for one sentence. While they are screaming and yelling about the fact that we closed the border for their own advantage, they are quietly celebrating in their beer halls about our stupidity. Because Mexican truckers generally do not want to compete with U.S. truckers. So on one hand, they are going to tell us ''you should never have closed that border'' and on the other hand, they are saying ''give us another year and we will be a stronger competitor when they finally open it.''
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  Mr. Chairman, some might want to frame the NAFTA debate as a choice between increased trade and safety. And that is a phoney debate, it is a false choice. Truckers know we can increase jobs and economic opportunity on both sides of the border and we can do it safely. And no one has been a greater champion of highway safety than ATA. And by the way, I am really excited, in case you have been out of town for a few days, the government has just released their new safety numbers. First of all, there is a bad number there and that is highway deaths in the United States in 1995 over 1994 have gone up a couple of thousand. But trucking-related fatalities have gone down, notwithstanding the fact that we continue to increase vigorously the miles that we drive in the United States. We are making progress. I do not want to come back, by the way, a year from now, and report on those numbers because the increased speed limit is going to hurt those numbers.

  Now, we believe in strong and aggressive inspections--fair--and enforcement programs at the border, but we should not allow discrimination. Quite frankly, we need to treat the Canadian border the exact same way we treat the Mexican border, and if we do not, we had better ask ourselves why.

  In addition to U.S. efforts to improve highway safety, the NAFTA countries are working very hard with us to do that. They have adopted Commercial Vehicle Safety Alliance standards, they have the stickers on their trucks. They adopted the commercial drivers license deal. They are making progress in harmonizing the hazardous materials movement. But some people will never be satisfied, and you need to understand this, because safety enforcement efforts are not what they are really talking about. They have--they are using those as cover for really legitimate concerns, most of them.

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  Some people are concerned about jobs, will they lose jobs to Mexico. Well, maybe they will lose a few, but how many jobs will they create because of the tremendous increase in exports? Some people are fronts for other organizations who are concerned about their competitiveness within the United States and outside the United States. And I think all you need to do is sit up there and look out at the people that testify here and say what is their ax and why are they grinding it. You all know what we are talking about.

  But the border, Mr. Chairman, needs to be opened. And let me make just a final two comments. When we open this border, we had better figure out that we need to pay attention to the infrastructure. Our road system in the United States is an east-west system and we are going to need some more north-south roads. I am not going to take a position on which one of the corridors we need to use, whether they ought to come out of Kansas City of Minneapolis or Denver--might even get one out of West Virginia.


  Mr. PETRI. That is where it all starts.

  Mr. DONOHUE. That is right. The point is we need to take a look at building those roads and I want to tell you where the money is. I think you would like to know where the money is. The money is in the highway trust fund. Because of a tremendous increase in the miles we drive, because of tremendous reduction in fraud,--well done, by the way, when you moved the tax collection way up--because of all the things that have increased payments, there is an extra $5 billion a year sitting in the trust fund. Take a little bit of it and recognize that this is a national responsibility. This is not Texas or California that needs to build these roads. We are going to have the largest trading population that we have ever dealt with on the other side of the Mexican border and we need to build the roads, and NAFTA will not work without it.
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  Summing up, Mr. Chairman, if we want to improve economic conditions for businesses and workers in the United States, if we want to improve our infrastructure, increase trade and commerce, create more jobs, let us do this thing and let us open the border. There is much to be realized from this vision and the questions we can probably talk about. The integration of these markets will do nothing in the long run but help the people of the United States. And I just hope that your visit here will be one more step in getting these borders opened and this deal realized.

  And I thank you very much for the extended time. I appreciate coming down today.

  Mr. PETRI. Thank you very much for your clear and provocative testimony and I am sure it will inspire some questions. Any on this side? Mr. Bonilla.

  Mr. BONILLA. Thank you, Chairman. I have a couple of questions if I may.

  First of all, I would also like to thank you for your excellent testimony, Tom. This has been a subject that was discussed at length this morning. So I have a question related directly to what you were discussing.

  GAO published a report in February that seemed to indicate that the Federal and State governments were not as prepared for the border to open last December as some were led to believe. Can you tell me what ATA's response was to that report. Because living here in Texas, we understand, that our Governor was totally prepared with an increased number of inspectors and we were all united in our willingness to move forward on this aspect of NAFTA. So I would be interested to hear what ATA has to say about that.
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  Mr. DONOHUE. Well, thank you very much for the question. I have a letter in this book, which I will not dig out, which we responded to GAO, and I will leave it for the Committee if it is all right to put it in the record. The GAO, you know, they are really good accountants and they are pretty good at what they do if they ask the right questions. If they do not ask the right questions, you get the wrong answer. So they are out comparing trucks that are in drayage crossing the border with trucks that are running up and down the national highways. They just picked all of the wrong questions. And their study is very, very misleading.

  Now as to the question of whether people were prepared for this small increase in movement across the border. And let us really understand what we were going to do. In December, what we were going to do is begin to accept applications to move trucks across the border. You were not going to see people roaring down the road and going across the border. People were going to apply. Second--and then we were going to accept the legitimate people.

  Second, you are going to continue to see a lot of interlining where people are going to come down, American carriers, drive across the border to a staging area, give the goods to their partners who are going to go on down the road. Same thing was going to happen in this direction, although there would be some people that would attempt to do more.

  The GAO report really did not understand the commerce, did not understand the differences in the type of trucking and they did not really understand how much had been done about safety, and their report reflected it. I was in--I think it was Arizona just a few weeks before this happened and we had visits from people from the Department of Transportation who had just finished with the Secretary this tour all up and down the Mexican/U.S. border. And they came in and said boy, we are prepared, we have got new people working in California and we have built new facilities in Texas and we have more money. We all know what happened here, and I am not arguing the politics of it, I am just saying this was not about whether we could do safety inspections and it was not about whether we were going to take X number or Y number of trucks off the road for being out of service. We do that every day in the United States. We do two million roadside inspections in the United States every single day--I mean every year--all day, every day. And you know what, we take trucks off the road because the light is broken, the brake does not work, and we fix it. We were prepared to do this. The Governors said it, the Highway Patrol said it, the Transportation Department said it and the USDOT said it. The President and his advisors chose otherwise for their own reasons.
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  Mr. BONILLA. In the context of NAFTA, there has been a lot of misinformation circulating around Capitol Hill and contrary to what CRASH is saying, it is my understanding that the operation of triple trailer truck combinations are not currently permitted in Mexico. Could you comment on that, please?

  Mr. DONOHUE. Well, you know I have some differences of opinion on what CRASH says.


  Mr. DONOHUE. And I occasionally--after that comment started wrangling around the Hill, we asked Paco Davila, who is a member of the Senate, former head of CANACAR, who is the head of the Transportation Committee in the Senate--we called up and said, ''Paco, do you have any triples in Mexico?'' And he said, ''No, we do not allow them, we do not allow anything longer than 31 meters.'' And I have a letter from the Senator which was sent to me and distributed around the Hill, that says we do not have them, we are not going to have them and we are not going to send them there. And here is the letter and I will put it in the record.

  I know it made great press to go out and say well, you know, you have got to close the borders or those guys will send the triples over here. The only way they are going to send triples is if they pick up another one when they get on the other side.

  Mr. BONILLA. There was a witness whom appeared earlier who said only 2 percent of these alien trucks that are crossing our border would be inspected and how horribly dangerous that would be to the safety of children and driving in cars on the highways around here. Can you address whether that figure is accurate and how it compares to an inspection of American trucks, for example, that are routinely inspected here in the states.
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  Mr. DONOHUE. Thank you very much.

  Congressman, we have to be very careful now about the word ''alien'' now that we are finding life on Mars and all that sort of thing.


  Mr. BONILLA. I think they found a truck up there too.

  Mr. DONOHUE. That is right, I am sure it was a triple.


  Mr. DONOHUE. Let me just say that the two percent number is correct. But let us understand what we are talking about. A large number of the trucks--and these trucks by the way come back and forth every day. Okay? So a large number of the trucks have been inspected within the 3 month period and have a CVSA sticker on them, so we know that they have been recently inspected, and you do not stop them.

  Second, if you took all the rest of the trucks and over a 50-day period of time you inspect every single one of them because they keep coming back and forth. So we inspect two percent every day, ten percent a week. Think about that. That is a much, much higher number than we do inspecting trucks around the country.

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  If you drive a big truck around the United States, you can expect to be stopped two-three times a year. And if you belong to the CVSA and you have a regular inspection on a highly professional level, when you are stopped, they take a quick look around and they let you go on your way. And still we take, depending on where we do the inspections and how strong the inspection is, 10, 15, 20 percent of the trucks off the road momentarily while they make an adjustment. Why do we do that? Because we do not pull every truck off the road randomly, say every seventh truck, and inspect it. Under your leadership, they changed the rules at DOT and they now use the look, smell and listen test. And the ones they pull off the road for inspection are the ones that look like--I mean, what is the point of pulling a UPS truck off the road, they just inspected it 20 minutes ago. What is the point in pulling a Federal Express truck off the road. So they pull off the ones that look like they need inspection. And from that they take a percentage out.

  So I am telling you, when you are doing two percent a day, when you add to that the commercial vehicle safety stickers, you are doing the most aggressive inspection that you could. I mean everybody gets inspected every 50 days under that deal. And that is a big deal because these trucks are not going anywhere except back and forth across the border. But it does not sound as attractive as saying only two percent of these trucks are ever looked at. And that is a crock.

  Mr. BONILLA. Thank you, Chairman.

  Mr. PETRI. Thank you. I have a few questions I would like to explore with you.

  I wonder if you could comment a little bit on how the safety standards are being set and whether you believe Mexican motor carriers are being asked to demonstrate a higher safety standard than motor carriers operating on U.S. highways.
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  Mr. DONOHUE. I am going to explain this, but I would say yes, they are being asked to observe a higher standard. And then I would like to say in the early going, that is okay. Because it is very clear that the Mexican trucking industry, to adhere to our rules and standards has had to upgrade some of their equipment and I am looking forward to selling some of it to them from our used truck pool. But the point is they are having to upgrade the equipment, they had to train some of their people, they had to adopt some new rules about hazardous materials, so in the early going it is fine to use a more aggressive stance.

  Sometimes it has been a bit of harassment and some of the arguments that have been made in recent weeks, if we were running those trucking companies, we would have said wait a minute, is this inspection or is this harassment. And as I just spoke to the Congressman, when you add all of these inspections that are going on every day and the fact that people are at risk continually coming across that border, I think we are doing at least as much and probably much more than we are doing with American carriers around the country and, you know what, after awhile when people get used to the rules, when they all adopt the CVSA standards, when they upgrade the trucks, when more American trucks are going back and forth, U.S. trucks are going back and forth, we are going to come to a common standard.

  But will there be accidents? Yes. There are accidents now, it's exposure. But it will not be for the lack of very vigorous concern by government and strict interpretation of the rules and I think--you know, there is a great story I have to tell you about. They had a TV crew down here and they said ah-ha, we have got them, here comes this rickety old truck over from Mexico and they figured they have got them because they break all the rules, the truck falls apart and they are telling the story and the commentator is going on and on and they pull the truck over. The truck was from Texas, it was registered in Texas and it had nothing to do with Mexico, it had just been doing a little drayage thing back and forth. But they are all getting better and they are doing a good job.
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  Mr. PETRI. Let me ask you a question that some of the people who have been observing this hearing have been asking, and that is leaving aside whether it was politics or safety or whatever behind the Administration's decision to have a moratorium on moving forward with NAFTA arrangements, what is your read on how we get back on track and what sort of timetable is realistic?

  Mr. DONOHUE. Well, let me speak very seriously. I think the way we get back on track is we finish the elections and whoever comes into office, be it President Clinton or President Dole or President whomever, and whichever party rules the Congress, the houses of Congress, will sit down and say by the way, oh, yes, with the people from DOT and the trade office and Commerce and we say now we have done all that, now let us get on with what our agreements are and support the movement of goods.

  I think it is very important that government understands one fundamental fact, that on the other side of that border, there are four things that are absolutely essential to this nation. First of all, there is a huge consumer market that we would rather serve than have others serve.

  Second of all--and this is very sensitive--but there is a massive population that are available for employment. And I want to tell you that in our business and in many businesses in this country, we have a major demographic dip coming up and there will be a huge shortage of factory workers and truck drivers and people of every type, and there is going to be some immigrants needed--by the way we have done that ever since way, way back when our grandparents came here to do the same thing--there are going to be some immigrants needed to help expand our economy.
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  The third thing that is on the other side of that border, and do not ever lose sight of this, there is enough natural resources in Mexico to sustain us in the event of a long-term disruption in the Middle East. There is unbelievable reserves of petroleum.

  And finally, Mexico is the access to and the protection from the rest of Latin and South America for the United States. Now if you look at that, you need to understand that no matter what government does, trade is going to continue to grow. Here we had the peso in the can, the Mexican economy in trouble, we had all the things we are doing here in the United States and in Mexico to impede trade and we get a 16.5 percent increase in exports to Mexico in 1 year. So no matter what government does, water is going to find its way and this trade is going to continue for the reasons I indicated.

  So what government should do is what it does best and that is facilitate an orderly and safe and a reasonable process. It is going to happen, Mr. Chairman, and there is nothing anybody is going to do to stop it.

  Mr. PETRI. Another question in that general area of water seeking its own level, I guess. There has been--and you referred to it I think in your testimony earlier--there has been kind of a long-term competition between the trucking and the train industries. There are some signs it is drawing slowly to an end or at least diminishing in the United States because of cross-linked ownership and because of other partnerships that are being driven by our just-in-time efforts to be more and more efficient and labor conditions and a variety of other factors. How do you expect this movement to actually grow, do you think an awful lot of it will be intermodal over time and arrangements like Union Pacific is working on now might be a way of inviting cross-border inefficiencies that are ''institutional'' or do you think trucking will be able to continue to compete and grow. How is the pie going to be divided and does it make a whole lot of difference at the end of the day?
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  Mr. DONOHUE. I think that is a very good question and the best way to start to answer that is to tell you very briefly how the pie is divided in the United States.

  The railroad industry does about $33 billion worth of business, employs about 230,000 people. The trucking industry does about $350 billion worth of business and employs 7.8 million people plus another amount that make the trucks.

  There are natural products that are never going to go any significant distance in trucks, they are going to go in trains. Grain is going to be hauled by trains more than it is going to be hauled by truck, although it gets to the train. Coal in many places is hauled by train. Copper and iron ore and steel and automobiles, because that is what the auto industry does--they do not own any storehouses, they put them all on trains and then they go to distribution centers. So there is natural phenomenon.

  And over the last couple of years, the rail business has gone up about $5—6 billion because we invented the double stacked container and trucks are giving this business to the rails and saying take it on the long haul for us because it is cheaper, more efficient and we do not need as many drivers. And that is going to expand. I expect over the next 4 or 5 years, the railroads will take up another $5 billion worth of intermodal freight. And so what will happen in the next 4 or 5 years, they will grow another 5 or 6 or 7 billion dollars and we will grow another $100 billion--that is $100 billion--another billion tons of freight.

  Now what is going to happen in Mexico? First of all, the same factors are going to happen. There are some things that are going to go on trains because they belong on trains, and there are some things that we are going to encourage the railroads to take because it makes more sense to put it on railroads. As a matter of fact, I think there are some trans-border opportunities on railroads that are maybe even greater than they are here in the United States. Now all this is going to take some infrastructure deal. I mean, you know, the railroads have been abandoning lines in the United States at a rapid rate and we are sort of reaching the point--they can only take a certain amount more. I am not going to get into all the details. And they know that. But I think we are going to take the same benefits that we have learned here in the United States over the last 5 or 10 years and we are going to export those to the movements to Canada and Mexico because, you know, when you learn how to use technology, when you learn how to do it cost-effectively, when you learn how to do it together, then it gets pretty sensible. That is sometimes why we scratch our head and say why are the railroads paying for CRASH to dump on their major customers. And I hope that is sort of going to get worked out--it is going to get worked out one way or the other.
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  But you know, here we are, people say we would like to give you another five or six billion dollars worth of freight business, would you take it. And so that is what is going to happen--my opinion.

  Mr. PETRI. Mr. Geren.

  Mr. GEREN. Mr. Donohue, I hated that Texas anecdote because my buddies from Pennsylvania and West Virginia are going to want to move these check points from the Rio Grande to the Red River, I am afraid.

  Mr. DONOHUE. No, they are not going to want to do that.


  Mr. GEREN. Have you all done studies to try to estimate what the opportunities are for American trucking companies in Mexico and what part of that market is potentially a market for American carriers and what sort of opportunities do present themselves beyond the border?

  Mr. DONOHUE. Can I tell a little funny story about Texas first?


  Mr. DONOHUE. No, no, this is about trucking.

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  Remember when we were going through state trucking deregulation some year ago or so? One of the states that was opposed to that was Mississippi, one of the state trucking associations, vehemently opposed to it.

  And one day, they called up and said we have changed our mind, we now vigorously support state trucking deregulation, and I said why. And they said well, we had a meeting and we figured out that if we kept all the trucking business in Mississippi, we would have $1000 worth of business. If we could go get a piece of some of the trucking business in Texas, we would have a billion dollars worth of business. I said I understand. And I think the matter is here to recognize.

  First of all, in the early going, what you are going to see in Mexico is some of the larger, better financed, more extensive and multi-faceted companies in the United States will establish relationships with trucking companies in Mexico. You do not want to go down there and set up all by yourself, that is a bad idea. So you will see a lot of partnerships, a lot of joint ventures, a lot of acquisitions, and those will, over time, provide for a very significant position for American trucking companies operating between the United States and Mexico and with the Mexican partner doing a lot of the local distribution.

  Let us be serious. The American trucking industry over the last 15 years has improved its ability to use technology, to manage its assets, to design its equipment, to train its people. And we are a very significant force to be dealt with. That is one of the concerns on the other side of the border. But given the opportunity to do this in an orderly way, you will find that the American trucking industry and the American worker will significantly benefit.

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  I know all the arguments about what people get paid there and what they get paid here. That is going to rationalize its way as we go, but the tremendous advantages that we have in efficiency are going to accrue very, very well to our industry, and I might say, Mr. Geren, very well to the trucking industry in Texas and Arizona and New Mexico and California who will have a very good opportunity to be the first in line to do that.

  I also would just say one other thing. You know, there are about 300,000 trucking companies in the United States. It is amazing how many small to medium sized companies have found a little niche. You know, they have found a particular product and a particular person on the other side of the border and they have a little business going. This is America. And it is America there too. It is North America and there are a lot of entrepreneurs and you are going to see all kinds of efficiencies and improvements when we are finally able to do it.

  Mr. GEREN. Thank you. Thank you, Mr. Chairman.

  Mr. PETRI. Mr. Rahall.

  Mr. RAHALL. Thank you, Mr. Chairman. I just want to follow up on a question that Mr. Bonilla asked you earlier, and I have asked you this question before. One hearing I believe CRASH was even in attendance and they heard your response.

  But the question is have you ever, are you now or will you ever----


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  Mr. RAHALL. ----ask Congress in any way, shape or form to increase, as part of ISTEA or whatever, truck weights and limits.

  Mr. DONOHUE. Not that I can recall, Mr. Rahall.


  Mr. DONOHUE. Let me remind you what I said. I said two things at your hearing where you raised that question. One is that we do not have any plans to go out and try and get bigger trucks, bigger weights in this next bill or any near time. I did point out that it is impossible for us--following Mr. Geren's question--it is impossible for us to do the nation's business if we take a picture of the nation's economy in 1995 and snap it and never change anything again.

  In fact, in some of the appropriations bills, without our doing and without our support, some people have been making some exceptions here and there about trucks that haul beets and other kinds of things. I do not know whether you have seen that.

  The fact is that the present size of trucks that we have are quite adequate. The question, however, might be that if in one state we are running a series of trucks on certain kinds of roads safely and productively, why would the state next door that has the same kind of roads, the same kind of economic demand and a big factory they put down at the end of the road, why would they not want to use the same types of things from the state next door. Now I do not know how we get there, but we do not need bigger trucks for that and we do not need more weight.

  But I do want to say one other thing about the weights. The only reason I have been a little, you know, trying to be very careful about the weight issue, the government of the United States of America, the government of Canada and the government of Mexico negotiated a NAFTA agreement and in that agreement, they said that at some point in time, we have to rationalize weights between Mexico, Canada and the United States. And you all know the weights are higher in both of the other countries. I do not need a lot of other weight right now because basically they give it all to the shipper, you know. But at that time, there is going to be a discussion on it. But nothing can be done until the Congress approves it. So nobody is going to come in and try and pull some quick deal by saying well, we made a deal with Mexico. The Congress has to approve it. And nobody is going to come in and try and get bigger or longer or heavier trucks in this next deal. We are going to sit down with your Committee and say now look, you yourselves have indicated in your own states that between 1991 and 1997 there have been some changes in your economies and the way you do business and there might be some flexibility you want to put in with the governors and others to consider what we are now doing and whether we ought to be able to do it in other places and that is totally up to you guys.
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  My list of ten things that we want to get out of highway reauthorization, it is at the bottom--size and weight--because I do not need it bigger and I do not need it longer and we just need a little flexibility to run our business and I think that is fair and I think it is reasonable and I think it is honorable.

  Mr. PETRI. Mr. Borski.

  Mr. BORSKI. Mr. Chairman, Mr. Rahall kind of asked all my questions. If I could just expand on it a little bit, Mr. Donohue.

  How do you see harmonization working, is it working at this point? Is there--are we reaching any agreement with the Mexicans or Canadians over the size and weight.

  Mr. DONOHUE. You know, Mr. Borski, it is interesting to look at trade agreements. I was recently in Europe for the meeting of the International Road Union, and you know, those folks are trying to set up this EC. And it has got more fits and starts and bumping into each other and carrying on and changing the deal and opening borders and then using customs to change it. And you know, these things have been going on for centuries and you are going to have some normal interruptions in this process. While that has all been going on and everybody is down in Brussels, you know, having all these meetings and doing all this stuff, folks are moving products all over the European community, although they have economic problems that far go beyond anything that we have. And this is true in lots of other places around the world.

  So we might expect an agreement that has just been negotiated a few years ago to have all sorts of bumps and starts and problems and everybody doing their politics, by the way, on both sides of the border. And so I think the harmonization is going better because we have got 16 percent more exports and I think harmonization is going better because we are here and because we are going to our alliance meeting at the first part of September and we will have officials and business people and truckers from all three countries sitting down saying how do we do it better, how do we do it safer, how do we do it without all this paperwork. And oh, yes, in the hidden little secret, how do we do it without moving drugs across the border. And we are absolutely committed to doing that, but you have got to first do your economics--I do not mean you stop the drug interdiction--economics is one thing and then drug interdiction is something else and we need to do it and we need to do it well.
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  Mr. BORSKI. One further question if I can. Under the terms of NAFTA, at some point in the not too distant future, the border is to be completely open. Is that----

  Mr. DONOHUE. Well, do not test my memory too much. But here is the way it worked and I did not like it too well when they negotiated it. Basically what our government said is we are going to let you--we are going to have a race and we are going to let you guys have a two block head start and so you can come into the United States and drive all over the place before we can go into Mexico and drive all over the place, and the reason was that we are a more sophisticated industry, a more sophisticated economy and we were going to give those guys a head start.

  Well, the whole thing takes 10 years, as I recall. And first is 3 years, 5 years, 10 years. My view about this is that all of it will slide a little because of what happened, but that by the time we are a little grayer and a little older, but while we are still around doing what we are doing, you will see so much trade between Mexico and the United States, you will see Mexico and the United States and Canada sitting down and talking not about how to take care of the problems between themselves, but how to deal with the massive trade cartels around the world, how to deal with the southeast Asia cartel, how to deal with China, how to deal with the rest of Latin and South America, and particularly how to deal with the fast changing European continent who has 18 percent unemployment and are going to start to do a lot of things in government subsidies that are going to make it difficult for us to compete over there. And we had better get together because it is the only way we are going to compete around the world. But is it going to be bump-free? Is it going to move smoothly? It is going to be a zoo.

  Mr. BORSKI. I guess my question is how can the Mexican trucking companies compete with ours? Can they and will they be able to?
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  Mr. DONOHUE. Well, I think they have three advantages. First of all, they have a cultural advantage, they understand the society, they know the business people, they are long established families that know their way around.

  Second, they already have the business and they have a big leg up.

  And third, the smart ones are going to make business arrangements with American trucking companies that have capital and technology and they are going to be able to compete.

  Now that is not a one-sided deal, because we on this side of the border who do not have the cultural advantage and do not have the current business are going to make partnerships with Mexican trucking companies who have those advantages, and what we are going to bring to the table is capital and technology.

  When we get all finished, what are we going to have? We are going to have a much, much stronger and safer transportation system. Remember, good highways, thoughtful border crossings and good management of the system reduce accidents and make it safer as well as productive.

  Mr. PETRI. Thank you for your thought-provoking testimony. We want to really thank all of the panels who appeared here today. We want to especially thank our host, Representative Bonilla, the cities of Laredo and Nuevo Laredo, our observers from Mexico and all those who are here who helped make these hearings possible.

  And with that, this hearing is adjourned.
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  [Whereupon, at 2:00 p.m., the Subcommittee was adjourned.]

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