IMPLICATIONS FOR TRANSPORTATION OF THE NORTH AMERICAN FREE TRADE AGREEMENT

The North American Free Trade Agreement (NAFTA) promises to increase trade among the United States, Canada, and Mexico and could considerably liberalize freight carriage across borders. Signed at the White House in December 1992, NAFTA could ensure that U.S. trucks and trains have competitive access to the market of more than $50 billion in U.S.-Mexican trade that is moved by land. The U.S. Congress must now approve or reject the agreement; similar approvals will be required in Canada and Mexico. If NAFTA is approved more or less as drafted, one of the first steps for liberalizing trucking will occur three years after the signing of the agreement, at which time U.S. and Mexican truck operators will be allowed to transport international cargo to the border states of the other country. In addition, NAFTA would allow service to all points in all three countries in the sixth year after it takes effect. In the seventh year, Mexico would begin allowing up to 51% ownership by U.S. and Canadian companies of Mexican truck and bus companies that provide international cargo service and in 10 years would allow 100% ownership. This article provides some background information on freight transportation with Canada and Mexico, discusses the implications of NAFTA for the Texas Department of Transportation, and comments on the broader implications of NAFTA for transportation.