Press Releases

August 31, 2012

Administration to Negotiate Tariffs Hurting Mack Trucks

Sen. Toomey And Rep. Dent Urged Agreement To Level Playing Field For Lehigh Valley Truck Maker

WASHINGTON, D.C. – U.S. Senator Pat Toomey and U.S. Representative Charlie Dent (PA-15) announced today that U.S. Trade Representative Ron Kirk has agreed to negotiate an accelerated elimination of specific automotive tariffs impacting Mack Trucks. Exports of Mack trucks built in Macungie to Colombia have decreased in recent years due to other nations, such as Mexico, negotiating more favorable terms for their trucks.

Ambassador Kirk’s response comes after Sen. Toomey and Rep. Dent led a bipartisan, bicameral letter to him in May requesting he improve the U.S.-Colombia Trade Promotion Agreement by working to eliminate these tariffs, which would lead to more exports for Mack.

“The administration is prepared to make such a request to Colombia under the tariff acceleration provision of the (Colombia Trade Promotion Agreement) with respect to the goods you identified in your letter. As U.S. suppliers have traditionally had a strong presence in the Colombian market for heavy-duty trucks, we certainly support steps that would enhance that presence,” Ambassador Kirk wrote in his Aug. 28 response.

Sen. Toomey and Rep. Dent thanked Ambassador Kirk for his willingness to work with them to resolve this issue and secure jobs in Allentown.

“Mack Trucks is an iconic Pennsylvania brand whose ability to grow and create jobs is partly dependent on its ability to export its products from Macungie to other parts of the world,” Sen. Toomey said. “Therefore, it’s critical for jobs here at home that the trade representative negotiate an elimination of these truck tariffs so that the trucks made here in the Lehigh Valley are given the same access as those made in Mexico. I appreciate Ambassador Kirk’s willingness to work with us to open and expand markets for Pennsylvania products and to create jobs in the commonwealth.”

“The U.S. trade representative’s decision is certainly promising news for Mack Trucks and its many Lehigh Valley employees,” said Rep. Dent. “The elimination of automotive tariffs will provide Mack a level playing field in Colombia, helping the iconic American manufacturer better compete with its international rivals. I appreciate the administration’s willingness to open the Colombian market to manufacturers like Mack Trucks and encourage the president to pursue opportunities for American producers in additional markets.”

Mack Trucks, a manufacturing icon in the Lehigh Valley, assembles heavy-duty trucks solely in the United States for the North American market.

The U.S.-Colombia Trade Promotion Agreement eliminated a 15 percent tariff on various automotive exports, such as heavy duty tractors. However, the tariff affecting straight trucks (mixers, dumps, concrete pumps, water and fuel trucks, and smaller tractors) will phase out incrementally through a 10-year period. In contrast, tariffs on Colombian exports of similar products to the United States have been eliminated, and Mack’s competitors in Mexico face no tariffs on exports to Colombia.

A copy of the original letter to Ambassador Kirk is below.

May 1, 2012

Honorable Ron Kirk

Office of the United States Trade Representative

600 17th St. NW

Washington, D.C. 20508

 

Dear Ambassador Kirk:

We write to ask that after the U.S.-Colombia Trade Promotion Agreement enters into force on May 15, 2012, you improve that agreement by securing an arrangement with Colombia to eliminate certain automotive tariffs on U.S. exports sooner than is currently provided.  As you know, this type of accelerated tariff elimination is permitted without further legislative action if both participating countries agree following the final implementation of the agreement.  Doing so will level the playing field for U.S. manufacturers, increase U.S. exports, and create U.S. manufacturing jobs.

Mack Trucks, Inc. is part of the only truck group (Volvo Group) that assembles its heavy duty engines and trucks solely in the United States for the North American market.  Mack exports heavy duty straight trucks and tractors from the United States to Colombia and currently faces a tariff of 15 percent. 

In contrast, Mack’s competitors in Mexico currently have duty-free access to Colombia due to a trade agreement the countries implemented in 1995.  This disparity gives these competitors a 15 percent tariff advantage in Colombia.  As a result, Mack’s historic 20 to 30 percent share of this market has fallen to approximately two percent.  This is unfortunate as the Colombian market for heavy duty trucks has expanded significantly in recent years.

In the U.S.-Colombia Trade Promotion Agreement, the 15 percent tariff applied to many automotive products including heavy duty tractors exported from the United States will drop to zero immediately upon implementation.  For other U.S. automotive exports, however, specifically straight trucks such as mixers, dumps, refuse, concrete pumps, water and fuel trucks, and smaller tractors – the 15 percent tariff is set to phase out in equal increments over the course of 10 years.  The U.S. tariffs on Colombian exports on these lines, by contrast, are eliminated immediately upon implementation of the Agreement. 

We respectfully request that your office seek an accelerated elimination of Colombian tariffs on U.S. exports of straight trucks such as mixers, dumps, refuse, concrete pumps, water and fuel trucks, and tractors under Article 2.3.4 of the U.S.-Colombia Trade Promotion Agreement.  This will help to fulfill the stated goal of the President’s National Export Initiative, leveling the playing field for U.S. exports by giving U.S. manufacturers better access to this emerging market.

We hope your office will make this action a priority upon full implementation of the Agreement. Please do not hesitate to reach out to our offices for more information.

Thank you for your consideration of this important matter.

Sincerely,

 

Sen. Pat Toomey

Sen. Barbara Mikulski

Sen. Ben Cardin

Sen. Kay Hagan

Sen. Richard Burr

Rep. Charlie Dent

Rep. Roscoe Bartlett

Rep. Bill Shuster

Rep. Lou Barletta

Rep. Pat Tiberi

Rep. Jim Gerlach

Rep. Mel Watt

Rep. Shelley Moore Capito

Rep. Howard Coble

Rep. Steve Stivers

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