In December of 1998 Carlos Salinas de Gortari, a young Harvard educated economist decided to put all his bets in the opening of the Mexican economy to full globalization.
Its cornerstone was the negotiation of a free trade agreement with the United States and Canada to create a massiveeconomic area in North America. This treaty was NAFTA, a an international treaty of free trade in North America that was approved by Canada, United States and Mexico.
NAFTA’s most important trait was free movement for transportation companies to move and invest freely in the North American region. Transportation companies of the three countries could move their exports in trucks throughout the region. AMexican company could move products directly from its producing plant to the final market with their own trucking services.
But nobody foresaw that the United States would violate the agreement by disallowing Mexican investment in trucking companies in the United States, or in permitting the free movement of Mexican trucks into the United States.
The U.S. government received substantial pressure from organized labor such as the Teamsters and ecological groups, like the Sierra Club, which claimed Mexican truck companies were unsafe to travel in US highways. From the Teamsters the reason behind their opposition was to maintain their status as major providers of truckers and drivers to the US industry.
In response to that flagrant violation of the treaty, the Mexican Government filed a state to state arbitration procedure base on article 20 of NAFTA seeking instituted country-to-country arbitration against the United States. Canada intervened in Mexico’s behalf. In 2001, the five person panel (two appointed by Mexico, two by the United States, and one independent) expressly held that the United States was in violation of both Chapter 11 and 12 of NAFTA.
In spite of the unanimous condemnation by the arbitration panel, the United States disregarded the award and did not comply; consequently, Mexico imposed tariffs of US$2.4 billion in imports of United States goods.
Based on the decision by the arbitration panel, in 2009 CANACAR as the leading organization of trucking companies of the United States, filed an arbitration procedure against the United States to seek the recovery of damages cost to the Mexican trucking industry for the violation of NAFTA by the United States.
The United States Government disqualified the position of CANACAR as an investor or trucking company. Consequently, in October of 2014, an addition to the original arbitration request was presented on behalf of 3,922 Mexican trucking companies seeking to recover US$382 million dollars per year, for every year of violation of the treaty. These companies represent 305,000 trucks, 25% of the Mexican Trucks fleet that can internationally transport goods to the United States.
Meanwhile the United States of America negotiated with the Mexican Government the establishment of a three-year “pilot program” that would allow Mexican companies to enter the United States if they would comply for certain safety measures unilaterally established by the United States. In response, the Mexican government withdrew sanctions against the US imports. The “pilot program” received the participation of 14 companies that made 5,000 crossings into the United States in three years. Now the United States is obligated to open the border and comply with NAFTA. Also the United States is obligated to pay US$3.8 billion in damages to 3,922 trucking companies .
The United States continues to violate the treaty which will only provoke Mexico to impose new economic sanctions against the United States.
This should be an item of discussion during the US-Mexico High Level Bilateral Economic Group meeting to be during the summit meeting between President Obama and President Peña Nieto in Washington next January 6, 2015.