Nafta

• Author: International Law Group

On February 6, 2001, an Arbitration Panel under Chapter Twenty of the North American Free Trade Agreement (NAFTA) published its final report in the matter of Cross-Border Trucking Services between the U.S. and Mexico. The U.S. had imposed a moratorium on the processing of applications by Mexican-owned trucking firms for permits to operate in the U.S. border states. The Bus Regulatory Reform Act of 1982 (BRRA) had imposed an initial moratorium against the issuance of new motor carrier operating permits to foreign carriers. The U.S., however, had immediately lifted the moratorium on Canada.

The U.S. President continuously extended the 1982 moratorium with respect to Mexican trucking companies. There are, however, a few exceptions that permit Mexican trucking companies to operate in the U.S., e.g., in the commercial zones of border towns. With a letter to the then-U.S. Trade Representative Michael Kantor dated December 18, 1995, Herminio Blanco, Mexico's Secretary of Commerce and Industry (SECOFI), asked for consultations under NAFTA Article 2006.

On September 22, 1998, Mexico formally requested a NAFTA Arbitration Panel, arguing that the U.S. has violated NAFTA by failing to phase out restrictions on cross-border trucking services and on Mexican investment in the U.S. trucking industry as required by the U.S. commitments in Annex I (reservations for existing measures and liberalization commitments). Mexico also complained that the U.S. has granted Canada national treatment. Therefore, the U.S. allegedly violated Articles 1202 (national treatment for cross-border services), and 1203 (most-favored nation treatment for cross-border services), and the investment-related Articles 1102 (national treatment) and 1103 (most-favored nation treatment).

Mexico does not argue that its regulatory system is equivalent to the U.S. or Canada, but claims that, in permit proceedings, Mexican trucking firms should...