NAFTA Panel Rejects U.S. Law Banning Mexican Trucks
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The agreement is a major setback for the Teamsters Union, which say this threatens American jobs. This issue has been the most prominent dispute surrounding Nafta, which virtually eliminated duties between the United States, Canada and Mexico.
The United States prevents Mexican trucks from going further than 20 miles from the U.S.-Mexican border commercial zones. To haul beyond that range, the Mexican trucks transfer freight to U.S. trucks, something the trucking industry says is very expensive.
But trade unions insisted that the restriction not only saves American jobs, but also keeps the highways safe. In 1997, a U.S. Department of Transportation study found that half the Mexican trucks inspected at the borders did not meet U.S. safety standards.
Bloomberg noted that the recent ruling might mean that Mexican trucks would not have to comply with U.S. safety regulations. However, a Financial Times report said the United States can impose U.S. safety requirements on Mexican trucks, as long as American trucks comply with the same standards.
Under Nafta, if the United States refuses to lift the restriction, it must pay Mexico a fine for the amount of damage caused to the Mexican trucking industry. If the United States and Mexico don’t agree to a fine, then Mexico could impose sanctions on U.S. imports, equal to the amount of the damage to the Mexican trucking industry.
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