U.S., Mexico closer to resolving trucking dispute

MEXICO CITY (Reuters) - Congress could be moving closer to allowing Mexican trucks to haul cargo through the United States, helping to end a trade dispute hurting some exporters, the U.S. Trade Representative said on Monday.

In March 2009, U.S. lawmakers canceled funding for a test program begun by the Bush administration that allowed Mexican long-haul trucks to circulate in the United States, citing safety and security concerns.

The truck ban prompted Mexico to slap retaliatory tariffs on a long list of U.S. exports, including fruit and industrial goods, worth an estimated $2.4 billion.

But U.S. Trade Representative Ron Kirk, visiting Mexico this week, said President Barack Obama had pushed Congress to remove the clause cutting funding for the program in recent legislation, a first step toward resolving the dispute.

"We have been able to work with Congress and Obama is very pleased that the language in the 2009 appropriations bill -- that essentially cut off the funding for the demonstration safety program -- was not included in the 2010 appropriations bill," Kirk told Reuters in an interview.

"By removing that prohibitory language, we just now have a green light to engage Congress again more thoughtfully."

Some U.S. businesses -- like paper producers, potato farmers and grape growers -- say they are suffering lost sales because of the duties Mexico imposed and they are pushing the Obama administration to find a quick solution.

"I can tell you that those industries in the United States, our farmers, our ranchers, our other exporters that have been subject of the retaliation, have made their displeasure known to Congress and so there is a sense of urgency," Kirk said.

He said his office's discussions with lawmakers and Mexico will "intensify" over the next weeks and months.

The United States had agreed to allow Mexican trucks to start using U.S. highways by 1995 after signing the North American Free Trade Agreement with Canada and Mexico.

But Mexican trucks were confined to border zones where they must offload goods to be carried by U.S. companies. In 2007, the U.S. government launched a pilot program that allowed a limited number of trucks full access to U.S. roads, while American trucks were also allowed to operate in Mexico.

U.S. organized labor, led by the largest trucking union, the Teamsters, along with highway safety and consumer groups, fiercely opposed the initiative, which was backed by former President George W. Bush.

(Editing by John O'Callaghan)