Back in 2001, a NAFTA Chapter 20 panel ruled that certain U.S. restrictions on Mexican trucking services violated U.S. commitments under the NAFTA. Implementation of this ruling by the U.S. has seen some stops and starts. The new NAFTA clarifies and limits the U.S. obligation:
Notwithstanding Annex I-US-8, the United States reserves the right to adopt or maintain limitations on grants of authority for persons of Mexico to provide cross-border long-haul truck services in the territory of the United States outside the border commercial zones if the United States determines that limitations are required to address material harm or the threat of material harm to U.S. suppliers, operators, or drivers.1 The United States may only adopt such limitations on existing grants of authority if it determines that a change in circumstances warrants the limitation2 and if the limitation is required to address material harm.3 The Parties shall meet no later than five years after the entry into force of this agreement to exchange views on the operation of this entry.
1 For purposes of this entry, “material harm” means a significant loss in the share of the U.S. market for long-haul truck services held by persons of the United States caused by or attributable to persons of Mexico.
2 For greater certainty, a substantial increase in services supplied by the grantee may constitute a change in circumstances.
3 The Parties confirm their shared understanding that current operations under existing grants of authority as of the date of entry into force of this Agreement are not causing material harm.
While I don't agree with Global Trade Watch's view of this issue, their explanation is helpful:
... The text includes a fix for a longstanding problem related to environmental and safety concerns with Mexican-domiciled long-haul trucks that were provided access to roads throughout North America by NAFTA. The Clinton administration decided not to allow access beyond a limited border zone based on a series of Department of Transportation Inspector General reports on safety and environmental problems with the vehicles. Mexico challenged this policy before a NAFTA dispute settlement tribunal and won. The Bush administration provided access, which Congress then reversed. After a NAFTA tribunal authorized Mexico to impose $2.4 billion in trade sanctions against U.S. imports for failure to comply with the NAFTA terms, the Obama administration approved access for Mexican-domiciled trucks despite the failure of a pilot program that was established to test whether the vehicles complied with U.S. safety and environmental rules. The revised NAFTA text includes new U.S. exceptions to the old NAFTA trucking obligations that allow the U.S. government to limit grants of the authorizations required to provide cross-border long-haul trucking services.
Does this effectively resolve the dispute, with both sides comfortable with the current degree of market access and the "safeguards" in the new NAFTA? Are there other safeguards for services imports out there? How will the U.S. process for determining threat of material harm work?
