Americans are paying a very high price for their government’s ugly dispute with Mexico over cross-border trucking – $2.3 billion in higher costs, $2.6 billion in foregone exports, and 25,000 jobs, according to a study released Sept. 15 by the U.S. Chamber of Commerce.

Under the 1994 North American Free Trade Agreement, existing restrictions on cross-border trucking were supposed to disappear by the year 2000. But after years of failing to live up to the agreement, this spring the federal government took a step backwards. It abruptly cut off funding for the rather limited cross-border trucking pilot program that existed as a baby step toward NAFTA compliance. That program allowed 100 firms to operate beyond a 25-mile zone next to the border.

Not surprisingly, the Mexican government responded with heavy tariffs on many American products including Christmas trees. According to the chamber’s study, the effects already are being seen. Either the products aren’t being exported anymore, or the added cost from the tariffs is being passed on to consumers. In addition, truckers taking goods between the U.S. and Mexico must continue to use short-haul drayage to move goods across the border. Under this arrangement, short-haul truckers pull trailers full of cargo across the border, to be picked up by long-haul truckers for delivery. This process introduces unneeded inefficiency and costs consumers and companies more money.

The Teamsters union has responded it’s NAFTA that costs American jobs, and that Mexican truckers are at fault for not meeting U.S. safety regulations. The U.S. Chamber has posted a rebuttal to the response.

Unfortunately, a recent report suggests that resolving this impasse is not an immediate priority for the Obama administration.