For The Defense, December 2011 - DRI Today

for Existing Measures and Liberalization
Commitments, Schedule of the United
States.
As these NAFTA deadlines loomed, the
United States relied on border security and
public safety concerns to support the decision
to extend the moratorium under the
BRRA, thus delaying implementing agreed
upon commitments to liberalize cross-
border trucking markets.
The United States Violates NAFTA
As the first date for border opening under
NAFTA approached in 1995, President Bill
Clinton extended the BRRA moratorium,
which prohibited Mexican truckers from
traveling more than 20 miles into U.S.
territory. In 1998, in response, Mexico
formally requested that a NAFTA arbitration
panel investigate and opine on the
impact of the U.S. failure to lift its moratorium
on the processing of applications by
Mexican- owned trucking firms for authority
to operate within the United States. On
February 6, 2001, the North American Free
Trade Agreement Arbitral Panel established
under Chapter Twenty of NAFTA
issued a final order, finding that the U.S.
had breached Article 1202 and 1203, as well
as the liberalization guidelines in Annex
I of NAFTA. North American Free Trade
Agreement Arbitral Panel, supra, at 81.
In addition, the panel specifically rejected
the United States’ assertion that Mexico’s
inadequate trucking regulations warranted
withholding permits. Id.
Although the ruling opened the door
for Mexico to impose new tariffs against
the United States, Mexico opted to continue
informal and diplomatic discussions
with the Bush administration, and
it did not take retaliatory actions. Later
that year, September 11, 2001, shook the
United States to its core, and the United
States tightened border security, making
liberalizing granting cross- border trucking
permits politically undesirable to pursue
given the increased focus on securing
borders. For years to come, the threat of
terrorism weighed heavily on many Americans’
minds when it came to border security,
and indeed, it continues to do so today
for many, and rushing to open the border in
any respect became less of a priority.
Mexico remained subject to the moratorium
until September 2008, when a
pilot program led to as many as 100 Mexican
trucking companies hauling cargo
across the U.S. border. Following the historic
political tug of war that comes part
and parcel with cross- border trucking,
the United States again quickly shut Mexico’s
window when in 2009, a spending
bill passed in Congress that cancelled the
program. This time, Mexico responded
with the retaliatory tariffs that became a
focus of the recent talks between President
Obama and President Calderon, culminating
in the 2011 MOU. See Drajem &
Gould, supra. Specifically, Mexico imposed
retaliatory tariffs on 89 categories of U.S.
exports totaling approximately $2.4 billion
in exports from 40 states. Organization
of American States, State’s Foreign Trade
Information System, Mexico, http://www.
sice.oas.org/ctyindex/USA/USTR_Reports/2011/
NTE/MEX_e.pdf. Against the backdrop of all
of this history the United States and Mexico
once again came to the bargaining
table to try to reach some common ground
regarding cross- border trucking. Perhaps
realizing that such an agreement could be
mutually beneficial, the two countries soon
executed the 2011 MOU, and the United
States renewed its commitment to cross-
border shipping.
Picking Up Where NAFTA Left Off
The inefficiency created by the 1982 moratorium
on licensing Mexican trucking
companies extended by President Clinton
drove the 2011 MOU negotiations. Due to
the licensing moratorium a Mexican carrier
transported goods to the U.S. border
by a Mexican carrier, delivered them to
a temporary short-haul provider to cross
the border, and then an American trucking
company picked them up to haul them
to a final destination. Such inefficiency and
expense drove the Mexican government to
press diplomatically for a new understanding,
while U.S. safety concerns ultimately
prevailed in the new pilot program created
under the 2011 MOU.
The 1994 MOU, as drafted by the U.S./
Mexico Joint Working Committee on
Transportation Planning, was intended
to address many of the most contentious
issues facing Mexico- United States cross-
border trucking. As stated in Article I of
the 1994 MOU, “The Parties intend to cooperate
on land transportation planning and
to establish methods and procedures to
analyze current and future transportation
infrastructure needs to facilitate efficient,
safe and economical cross- border transportation
movements.” See U.S./Mexico
Joint Working Comm. on Transp. Planning
1994 Mem. of Understanding, Article
1, http://www.borderplanning.fhwa.dot.gov/
mou1994.asp.
The 2011 MOU establishes
a pilot program… which
would allow Mexican
trucking companies to
engage in cross- border
shipping, provided that
they met the stringent
requirements of the MOU.
Generally, however, the 2011 MOU establishes
a pilot program of up to three years,
as determined by agreement of the United
States and Mexico, which would allow
Mexican trucking companies to engage
in cross- border shipping, provided that
they met the stringent requirements of the
MOU. See Mem. of Understanding Between
the U.S. Dep’t of Transp. & the Secretaria
de Comunicaciones y Transportes of the
United Mexican States on Int’l Freight
Cross Border Trucking Services, at Article
2, “Scope,” (July 6, 2011), http://www.fmcsa.
dot.gov/documents/Mexican_MOU_Eng.pdf.
Annex 1 of the 2011 MOU outlines the
requirements that a Mexican trucking
company must meet to qualify for a permit
to engage in cross- border shipping:
1. All Mexican- domiciled motor carriers
that wish to participate in
international freight cross- border
trucking services in the U.S. are to
complete the application OP-1 MX.
The application, and accompanying
application fee, is to be submitted to
FMCSA. Motor carriers who partic-
Mexico, continued on page 84
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