NAFTA, WTO, and Global Business Strategy: How AIDS, Trade, and Terrorism Affect Our Economic Future

By Bradly J. Condon | Go to book overview

Chapter 3

International Trade in Services

OPENING CASE: NAFTA TRUCKING AND THE INSURANCE INDUSTRY

By a 285–143 roll call, the U.S. House of Representatives voted on June 26, 2001, that it would block the Transportation Department from issuing permits that would let Mexican trucks operate throughout the United States. 1 This vote was the result of opposition from both the Democrats and the Republicans. The Democrats had been pushed hard by the trucker’s lobby and the Republicans by the insurance lobby in Washington.

The U.S. trucking unions had opposed the entry of Mexican truckers into the United States to transport goods on the grounds that the Mexican truckers would not meet U.S. safety standards. Underlying this opposition was the reality that U.S. truckers were likely to lose a lot of business. Each year, about five million crossings are made, hauling about three-fourths of the $250 billion in United States–Mexico trade. Under the new NAFTA panel ruling, instead of transferring their loads to U.S. truckers at the border, the Mexican truckers would be able to carry them to their final destinations in the United States. Moreover, transportation of goods by Mexican truckers would cost less, as the wages earned by the Mexican drivers are a fraction of what the unionized U.S. truckers charge for their services.

In February of 2001, a panel ruled that the U.S. moratorium on free movement of trucks between the United States and Mexico violated NAFTA. The ruling has generated a flurry of lobbying by a number of interest groups in Washington. In what follows, we analyze the history

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