CANACAR SAYS MEMBERS WILL NOT PARTICIPATE IN CROSS-BORDER

C O N F I D E N T I A L MONTERREY 000367 SIPDIS SENSITIVE SIPDIS E.O. 12958: DECL: 3/28/2017 TAGS: ELTN ECIN ETRD ECON PGOV MX SUBJECT: CANACAR SAYS MEMBERS WILL NOT PARTICIPATE IN CROSS-BORDER TRUCKING PILOT REF: A: MONTERREY 225 B: 2006 MEXICO 6368 C: 2004 MEXICO 9321 CLASSIFIED BY: Luis Moreno, CG, Monterrey, DOS. REASON: 1.4 (b),(d) ¶1. (C) On March 27, EconOff met with Magdalena Diaz, Director of the Nuevo Leon Chapter of the National Chamber of Cargo Transportation (CANACAR),and Raul Trevino of Transportes Aguila de Oro (TAO),a CANACAR-member trucking company headquartered in Monterrey. In anticipation of the CANACAR National Assembly meeting in Mexico City on March 28, EconOff was invited by Director Diaz to view a presentation outlining why, according to her, no CANACAR members will be participating in the cross-border trucking pilot program, which was announced on February 23. NOTE. Reftel A details EconOff's February 27 meeting with Monterrey-based CANACAR members to discuss their reaction to the pilot program. END NOTE. ¶2. (C) In addition to the concerns CANACAR previously expressed to EconOff (reftel A),Diaz and Trevino said that Mexican trucking companies are most concerned that they will be held financially and legally liable for their drivers' actions. In particular, they expressed their fear that drug cartels and smuggling rings will coerce drivers into carrying illegal immigrants and contraband (including money, weapons, narcotics, and precursors for manufacturing drugs like methamphetamines) back and forth across the border. Trevino couched it in these terms: "Participating in the pilot [program] is like announcing to the Mexican mafias, 'Hey - we can take your drugs and people directly from Monterrey to San Antonio!' They will come after our drivers and once they come after you, there's nothing you can do. And what happens when one of our drivers gets caught on the border or in the U.S. with these people or drugs? The [trucking company owner] will be held responsible and will be put out of business. We have a responsibility to our customers, employees, and shareholders not to let that happen." ¶3. (C) Director Diaz went on to speculate that, because of the risks associated with sending Mexican drivers to the U.S., the only trucking companies that will actually participate in the pilot program are small, single owner-operator companies that have fewer people (i.e. shareholders and employees) to whom they are financially and legally responsible. She added that none of these small trucking companies are CANACAR members, including Olympic Transport, the company selected to participate in the February 22 pilot inspection event. ¶4. (U) On March 28, Mexican media reported that CANACAR president Tirso Martinez had requested that members of Congress and the Undersecretary of Transportation Manuel Rodriguez postpone the implementation of the pilot program. CANACAR expressed its worry that Mexican companies will not be able to compete effectively with American trucking companies, in Mexico or in the United States. It has also alleged that Mexican drivers will face discrimination because the 22 criteria set by U.S. Congress in 2002 will be applied to Mexican companies seeking to function in the United States and not to U.S. companies in Mexico. ¶5. (C) COMMENT. An official of the Secretariat of Communications and Transportation (SCT) confirmed to EmbOff that CANACAR had made statements intimating that none of its members would participate in the pilot program. The official also said, however, that he had spoken to at least one CANACAR member that plans to continue with its application for the pilot program, and he expects other CANACAR members to do as well. As the official noted, CANACAR has never been fully on board with the pilot program or a full opening of the border to trucking, though March 27th's statements to Congress set forth their position much more explicitly than in the past. Officials from SCT and the Secretary of Economy's office continuously engaged with CANACAR representatives throughout the lead up to the pilot program announcement. (Reftels B and C) CANACAR president Martinez even spoke at the February 22 announcement of the inspections program in Monterrey, at the request of SCT. SCT had hoped that including CANACAR in the discussions and in the event would dissuade the organization from coming out against the program so directly. However, CANACAR's recent statements have not created a rupture, the SCT official said; an SCT representative is expected to speak at the CANACAR national assembly today. Despite current measures in the U.S. Congress to postpone the program and CANCAR's statements, the SCT continues to move ahead with the pilot program, in coordination with the Department of Transportation and the Embassy. END COMMENT. MORENO