NAFTA - Chapter 11

"The Blackmail Government Provision"



Cross Border Trucking - Blackmailing the Congress using NAFTA Chapter 11

While doing some research for the section on Harmonization of laws between Mexico, Canada and the U.S., I went back to the 107th Congress in 2001 to search for information the opening of the border for Mexican trucks beyond a 20 mile border area.   Apparently a NAFTA tribunal ruled that the U.S. border between Mexico and the U.S. must be opened for cross-border trucking.  

With the above as background, the significance of Vincente Fox's Address to Congress in the House of Representatives on September 6, 2001 becomes crystal clear.  The NAFTA Agreement, Chapter 11 gave Vincente Fox - and in fact all foreign firms the power to bankrupt our country through the Kangaroo Court process of the NAFTA tribunals.

Vincente Fox:

"Years ago, the United States Congress faced a difficult decision and chose to vote in favor of a greater integration with Mexico through the North American Free Trade Agreement.

   The partnership between Mexico and the United States is still incomplete. There remain many unresolved issues that must be dealt with in order to achieve our common goals as partners. One of these goals is an issue which this great body will soon consider and which entails an important obligation under NAFTA; it is the issue of access to the United States for Mexican trucks. For this, as in many other items of our common agenda, we need your trust. Trust will allow both countries to comply responsibly and maturely with their obligations to one another."


Fox got what he wanted from the U.S. Congress as it pertains to Mexican Trucking despite U.S. laws on truck and driver safety because of a decision by a NAFTA Chapter 11 tribunal.




From Senator Byron Dorgan's testimony - Congressional Record - Pages S7297 & S7298


   The North American Free Trade Agreement, which went into effect in January 1994, stipulated that the longtime U.S. restrictions on Mexican trucks be lifted.

   Under NAFTA, by December 1995, Mexican trucks would be allowed to deliver loads all

[Page: S7298]
over the four U.S. border states--California, Arizona, New Mexico and Texas--and to pick up loads for their return trip to Mexico. U.S. trucking firms would get similar rights to travel in Mexico. And by January 2000, Mexican trucks would be allowed throughout the United States.

   However, bowing to pressure from the Teamsters union and the insurance industry, President Clinton blocked implementation of the NAFTA provisions. The Mexican government retaliated by imposing a similar ban on U.S. trucks.

   As a result, the longtime status quo continues: Trucks from either side must transfer their loads to short-haul "drayage'' truckers, who cross the border and transfer the cargo again to long-haul domestic trucks.

   The complicated arrangement is time-consuming and expensive. Mexico estimates its losses at $2 billion annually; U.S. shippers say they have incurred similar costs.

   In 1998, Mexico filed a formal complaint under NAFTA, saying the U.S. ban violated the trade pact and was mere protectionism. The convoluted complaint process lasted nearly six years, until a three-person arbitration panel finally ruled Feb. 6 that the United States must lift its ban by March 8 or allow Mexico to levy punitive tariffs on U.S. exports.


   The planned border opening to Mexican trucks will pose a big challenge to U.S. inspectors, who will check to be sure that trucks from Mexico abide by stricter U.S. truck-safety regulations. Here are some of the differences:

   Hours-of-service limits for drivers--In U.S.: yes. Ten hours' consecutive driving, up to 15 consecutive hours on duty, 8 hours' consecutive rest, maximum of 70 hours' driving in eight-day period; in Mexico: no.

   Driver's age--In U.S.: 21 is minimum for interstate trucking; in Mexico: 18.

   Random drug test--In U.S.: yes, for all drivers; in Mexico: no. Automatic disqualification for certain medical conditions in U.S.: yes; in Mexico: no.

   Logbooks--In U.S.: yes, standardized logbooks with date graphs are required and part of inspection criteria; in Mexico: a new law requiring logbooks is not enforced, and virtually no truckers use them.

   Maximum weight limit (in pounds)--In U.S.: 80,000; in Mexico: 135,000.

   Roadside inspections--In U.S.: yes; in Mexico: an inspection program began last year but has been discontinued.

   Out-of-service rules for safety deficiencies--In U.S.: yes; in Mexico: not currently, program to be phased in over two years.

   Hazardous materials regulations--In U.S.: a strict standards, training, licensure and inspection regime; in Mexico: much laxer program with far fewer identified chemicals and substances, and fewer licensure requirements.

   Vehicle safety standards--In U.S.: comprehensive standards for components such as antilock brakes, underride guards, night visibility of vehicle; in Mexico: newly enacted standards for vehicle inspections are voluntary for the first year and less rigorous than U.S. rules.


From the Congressional Research Service:

The NAFTA tribunal gave Congress a choice:  Either pay Mexico $2 BILLION dollars or pass legislation to allow Mexican trucks into the U.S. despite the driver and truck safety issues.  

The issue with Mexican cross-border trucking is only one small issue.  Every American law and regulation is under attack or potentially under attack.  So why wouldn't Congress cancel the NAFTA agreement?   Even Pollyanna would be able to figure this one out.  Consider the level of corruption in Congress over the past 6 years - one Congressman in jail, another one or two others on the way, $100,000 found in a freeze of one, and that's not all.  Also consider the use of earmarks as buy-offs for Congressional votes.  

Now consider what Senator John McCain put a statement into the record describing what's happening in congress with the Conference committees.  Conference committees resolve the differences between House passed legislation and Senate passed legislation to produce a single bill for consideration.      

John McCain's statements in the Congressional Record:  

Congressional Record



Mr. McCAIN. Mr. President, I ask my colleagues, how much longer are we going to let the appropriators subordinate the jurisdiction and responsibilities of the authorizers? Didn't most of us think the multi-year highway funding legislation, known as TEA-21, would essentially be the law of the land through fiscal year 2003 with respect to highway funding formulas and state apportionments? I guess we were wrong, given the appropriations reprogramming maneuvers.

   Let me again quote from the Wall Street Journal:  "The negotiators made wholesale changes in the priorities set in the highway act, substituting projects they favor for the ones preferred by the House and Senate transportation committees that wrote the highway law.'' This is precisely why no projects should be earmarked by either the authorizers or the appropriators and we should instead allow the states to fund the projects that meet the legitimate transportation needs of their states.

   Mr. President, the Revenue Aligned Budget Authority--RABA--funds mentioned in the article are to be distributed proportionately to the states through formula apportionments and to allocated programs. This conference report represents a fundamental departure from that approach.

   To pay for some of the report's many earmarks, $423 million will be redirected from state apportionments, meaning the states lose 10.7 percent of RABA funds from the regular formula program. Further, another $423 million will be redistributed from allocated programs in a manner in which the appropriators have selected programmatic winners and losers. In fact, 24 of 38 highway funding programs will receive none of the funding under RABA they were to receive before the appropriators' stroke of pen. But again, if you have the good fortune to reside in a state with a member in a leadership position on the DOT Appropriations Subcommittee, you are among the winners in this appropriations bill lottery. I ask unanimous consent that two charts prepared by the Federal Highway Administration to show the impact on each state and the allocated programs through the RABA redistributing work of the appropriators be printed in the RECORD at this point.

   There being no objection, the material was ordered to be printed in the RECORD, as follows:

Note the amount slipped in by the Conference Committee for "National Corridor Planning & Devel. & Coord. Border Infrastructure Pg.