IN a small, pueblo-style house across from the University of
Arizona at Tucson, Boris Kozolchyk asks the burning question: "If a
Canadian buys an appliance from a Mexican dealer in Mexico City and
pays with a check ... when does the Mexican dealer get his money?"
The answer has to do with when, if, and how well the North
American Free Trade Agreement (NAFTA) gets off the ground,
beginning in January 1994. Once tariffs and other barriers to
trade, services, and investment between Canada, the United States,
and Mexico are dropped, North America will become the world's
largest trading bloc.
But how well it functions depends on hundreds of details that
need to be ironed out - from standardization of invoices and bills
of lading to warehouse receipts and model franchise agreements.
Some existing differences are purely mechanical in that they
reflect incompatible or cumbersome legal formalities. Other
differences are structural, reflecting sometimes firmly entrenched
attitudes in the interpretation and enforcement of laws.
For now, the man and the organization with most answers is Mr.
Kozolchyk and the National Law Center for Inter-American Trade
(NLCIFT) which he directs at the University of Arizona here. A
research and educational center with funding from Congress, the
state of Arizona, and the university, the center opened last May.
"We are here to do away with legal obstacles so that free trade
can happen quickly and efficiently," Kozolchyk says. Currently
budgeted at about $350,000 for a staff of three people, the center
has become the umbrella for dozens of volunteer lawyers in the US,
Mexico, and Canada, as well as professional and student researchers.
First few months busy
In the first few months, the center has worked on establishing
procedures for letters of credit (legal instruments used to ensure
payment for international goods or services), rules for selling
Mexican securities on the Arizona stock exchange, and regulations
on standardizing commercial invoices and designating surrogate
nationals with the power of attorney.
One major achievement has been establishing guidelines for
check-clearing. "The way things stood before, a Mexican holding a
Canadian check might have to wait days, weeks, months, or even
years," Kozolchyk says.
But in recent weeks, Kozolchyk has overseen meetings between the
Association of Mexican Bankers, the US Council on International
Banking (USCIB), and the Canadian Bankers Association. Guidelines
have been agreed upon governing check-routing, deadlines for
payment or rejection (24 hours), and uniform systems of
Checks changing hands
"The Canadians were hesitant to participate at first," Kozolchyk
recalls. "But then they took a look at the volume of checks
changing hands among NAFTA nations - literally millions per day -
and they were flabbergasted and realized something needed to be
Kozolchyk is a Cuban-American law professor at the University of
Arizona who is widely known as an expert on international banking
and trade law. …