Trade Panel: U.S. Violated NAFTA

February 7, 2001

An arbitration panel ruled unanimously Tuesday that the United States violated the North American Free Trade Agreement by barring Mexican trucks from most of its highways. But it said the United States can require Mexican truckers to meet U.S. safety and insurance standards.

The ruling, which came as no surprise to the government or insurance industry, turns the question of how to comply over to Pres. George W. Bush who must also determine the best way to ensure that American drivers do not share roadways with unsafe Mexican trucks.

The dispute began five years ago when Mexico accused the United States of breaching the NAFTA agreement by prohibiting Mexican trucks from venturing more than 20 miles into the United States. While the Arbitration Panel report ruled against the U. S., negotiations between the Mexican and U. S. governments are expected over the next several months to resolve the issue. Since the moratorium was established five years ago, Mexican trucks have had only limited access inside the U. S. border because of concerns about the safety standards of the Mexican vehicles.

Speculation by sources in both countries is that this ruling will precipitate a quick end to the moratorium, particularly now that President Bush, a proponent of free trade as Texas governor, sits in the Oval Office. What remains at stake is safety.

As estimated by the the U.S. Transportation Department, 35 percent of Mexican trucks that entered the United States last year were put out of service for significant safety violations. Those figures were made up primarily of drayage trucks making short runs across the U.S./Mexican border, however. Mexican officials insist, and many U.S. representatives agree, that Mexico’s long-haul fleet is better equipped and maintained.

“The Mexican government and other sources have told us that the long-haul vehicle fleets that would be deployed when the borders are opened have newer trucks in much better condition,” Golden said. “However, at this time we do not have confirmation regarding the safety of long-haul Mexican fleets.”

Mexico estimates that about 14,000 trucks cross the border daily and that it has lost about $2 billion because of the U.S. policy to bar its trucks until a reciprocal insurance agreement and adequate safety regulations are in place. About 70 percent of the approximately 5 million trucks entering the United States every year come through Texas.

The NAFTA arbitration panel included two Americans, two Mexicans and a neutral member from the United Kingdom. A text of its ruling was to be made public at 9 a.m. Wednesday. Meanwhile, a tri-lateral insurance panel plans to meet late next week for discussions on the most expedient way to implement insurance and safety measures.

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