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(Secretariat File No. USA-MEX-98-2008-01)



  1. Prior to 1980, the United States, through the Interstate Commerce Commission, granted operating authority to motor carriers for each separate, individual route, requiring economic justification for each proposed service. The United States, at that time, did not distinguish between United States, Mexican or Canadian applicants. However, the Interstate Commerce Commission severely restricted new entry into the United States domestic for-hire motor carrier transportation market.26

  2. In 1980, the Motor Carrier Act Aessentially eliminated regulatory barriers to entry, thereby making it easier for U.S., Mexican, and Canadian motor carriers to obtain operating authority from the ICC."27 The Motor Carrier Act did not distinguish between United States and non-U.S. nationals.28

  3. At the time the Motor Carrier Act of 1980 came into force, Canada already allowed reciprocal access for U.S. trucking operators in its domestic market, but Mexico did not offer such reciprocal access.

  4. The equal treatment in the United States of U.S. and foreign applicants for operating authority came to an end with the passing of the Bus Regulatory Reform Act of 1982, which contained a provision imposing an initial two year moratorium against the issuance of new motor carrier operating authority to foreign carriers.29

  5. This provision applied to Canada and Mexico. However, with respect to Canada, the moratorium was immediately lifted in response to Canada's Brock-Gotlieb Understanding, which confirmed that U.S. carriers would have continued access to the Canadian market. A Presidential Memorandum from September 20, 1982, lifted the moratorium with respect to Canadian trucking companies, stating, inter alia, that:

    In the case of Canada, our trucking industry is not now, nor has [ ] been, precluded from providing services into that country.... I believe that our national interest is best served by fair and equitable competition between the United States and Canadian trucking interests in our two markets.30


  6. In contrast, with respect to Mexico, the September 20, 1982 Presidential Memorandum stated that:

    I regret that with respect to Mexico there has not yet been progress sufficient to justify a modification of the moratorium. A substantial disparity remains between the relatively open access afforded Mexican trucking services coming into the United States and the almost complete inability of United States trucking interests to provide service into Mexico.31 
  7. The President of the United States extended the 1982 moratorium with respect to Mexican trucking companies in 1984, 1986, 1988, 1990, 1992 and 1995.32 Therefore, the moratorium continued uninterrupted.

  8. In 1995, the responsibilities of the Interstate Commerce Commission to issue motor carrier operating authorities were transferred to the Department of Transportation, under the ICC Termination Act of 1995.33 The 1995 Act extended the validity of any restrictions on operations of motor carriers domiciled in a foreign country or owned or controlled by persons of a foreign country imposed under the United States Regulatory Reform Act of 1982. The legislation preserved the moratorium and the President's authority to modify or remove it.34 

  9. The purpose of the moratorium was to encourage Mexico and Canada to lift their restrictions on market access for U.S. firms. Therefore, the U.S. Congress imposed a two-year initial moratorium on foreign carriers, which could be removed or modified by the President if such action was in accord with the national interest, if the foreign country began providing reciprocal access.35

  10. Although the moratorium continued in place with regard to Mexico, there were some exceptions allowed in order to facilitate cross-border trade. Several categories of exceptions allowed Mexican carriers to continue entering into the United States: the commercial zone of border towns exception, the Mexico-Canada transit exception, the "grand-fathered" Mexican operators exception, and the US-owned Mexican truck exception. Another exception, that of Mexican carriers who lease both trucks and drivers to U.S. carriers for their use, was allowed until January 1, 2000. Mexican owned and domiciled motor carriers that transport passengers in international charter or tour bus operations are also subject to an exception that began in 1994.36

  11. Mexican carriers have been permitted to operate in the commercial zones associated with municipalities along the United States-Mexico border since before 1982, and these operations were not affected by NAFTA.37

  12. As the regulations state, "U.S. motor carriers that operate exclusively within a commercial zone are not subject to the licensing jurisdiction of the Department of Transportation."38

  13. Commercial zones are identified by the Interstate Commerce Commission according to the size of municipalities. The more populous a border town is, the wider its commercial zone will be.39 Although the zones are generally within a radius of two to twenty miles of the nearest U.S. border city, the ICC and Congress have expanded certain border zones beyond their previous regulatory boundaries.40

  14. Mexican carriers are allowed to enter the commercial zones, provided they have obtained a Certificate of Registration from the Federal Motor Carrier Safety Administration.41 "The application process for Mexican motor carriers operating in border commercial zones is less extensive than the process by which carriers obtain authority to operate in the rest of the United States."42

  15. The application procedure consists of a form soliciting basic information on the applicant, another form identifying a U.S. legal process agent appointed by the applicant, an application fee and certification by the applicant that he has access to and will comply with Federal Motor Carrier Safety Regulations.

  16. The Federal Motor Carrier Safety Administration reviews the carrier application for correctness, completeness and adequacy of information. Applicants are not required to submit proof of insurance but inside the commercial zones, the Mexican motor carrier must carry evidence of insurance on board. This can be either trip or continuing insurance.43

  17. U.S. safety regulations apply to Mexican carriers operating in the border zones, but FMCSA does not apply its on-site compliance review requirements to carriers based in Mexico.

  18. Thus, all carriers are fully subject to all U.S. safety regulations. They must also have trip insurance, carry evidence of the insurance of their trucks, and have U.S. registered agents.44

  19. It appears from the submissions of both the United States and Mexico that the vast majority of the Mexican trucks entering the border zones are used solely for drayage services, i.e a Mexican tractor pulls a trailer from the Mexican side of the border into the U.S. border zone. The trailer is then transferred to a U.S. tractor, which transports the trailer to its final U.S. destination. In the current proceedings, the United States claims that most of the trailers are U.S.-owned, but there is also a significant trans-shipment of goods between trailers owned by different carriers.45

  20. Mexico and United States agreed that Mexican trucks used for drayage operations in the commercial zones tended to be older trucks. However, Mexico submitted that the comparatively poorer condition of the Mexican drayage trucks cannot be taken as an indicator for the condition of Mexican long-haul trucks.46

  21. In 1999, 8,400 Mexican firms had authority to operate in the commercial zones.47 

  22. The second exception relates to Mexican operators that transit through the United States to Canada. Under the provisions of 49 U.S.C. ' 13501, the Department of Transportation's jurisdiction is limited to requiring operating authorization from carriers operating between states of the United States or between a state of the United States and a foreign country. Congress has not granted the Department of Transportation the authority to require trucks transiting from Mexico to Canada to seek operating authority.

  23. Mexican trucks crossing the United States in transit to Canada are unaffected by the moratorium. Therefore, the Mexican trucks are allowed to enter the United States in transit to Canada and do not require any operating authorization to do so. The only formal requirements to be complied with by Mexican trucks consist of insurance and compliance with the U.S. safety regulations.48

  24. The United States claimed that a report on Mexican domiciled motor carriers prepared by the USDOT, Office of Inspector General, in 1999, indicated that only one Mexican trucking firm was then engaged in transit operations between Mexico and Canada through the United States.49

  25. "Grandfathered" Mexican trucking companies that had acquired operating authority prior to 1982, when the moratorium came into effect, are not affected. A total of five Mexican carriers are entitled to these exemptions.50

  26. The ICC Termination Act of 1995 exempts from the operation of the moratorium US-owned Mexican-domiciled truck companies.51

  27. U.S.-owned, Mexican-domiciled carriers total approximately 160.52 Their equipment must be either U.S. made or imported, duty paid. These carriers are either commercial, for-hire carriers transporting certain commodities, generally food or raw materials, or private, not-for-hire carriers transporting their own goods.53

  28. Prior to the enactment of the Motor Carrier Safety Improvement Act of 1999, Mexican carriers were able to lease out their equipment and drivers to U.S. trucking companies. The provision was intended to allow U.S. carriers to augment their fleets without making capital investments in new equipment.54 However, it was realized that "this provision could be used to, in essence, sell U.S. carrier's operating authority to a Mexican carrier for operations beyond the commercial zone." Section 219 of the Motor Carrier Safety Improvement Act of 1999 ended the leasing exception.55

  29. A change in the restrictions imposed on Mexican motor carriers occurred in 1994 when pursuant to an agreement between the U.S. and Mexico to provide reciprocal treatment for charter and tour bus operators, a Presidential Memorandum of January 1, 1994, was issued. This Memorandum authorized the Interstate Commerce Commission to issue operating authorities to Mexican-owned or -controlled passenger carriers for international routes between Mexico and the United States and not for travel solely between U.S. destinations. This position was preserved by Annex 1 of NAFTA, and Mexican tour operators thus continue to be allowed to provide cross-boundary services in the United States.

  30. Throughout the border zone transport, goods that are transshipped through the border zone generally remain in the same trailer. The trailer is transferred between long-haul and drayage tractors, and then back to a domestic long-haul tractor, as it crosses into the border zone. The Mexican trailer then is kept on the U.S. tractor during the transport throughout the United States. Such trailers are driven throughout the United States, attached to different U.S. tractors.56

  31. The United States explains its alleged lack of concern with Mexican trailers: "In practice . . . the safety of Mexican trailer components has not been a major issue, because eighty to ninety percent of the trailers used in cross-border trade are in fact U.S.-owned."57

  32. NAFTA came into force on January 1, 1994. Under Annex I of NAFTA, the Parties are obliged to phase-out certain reservations to Articles 1102 or 1202 (national treatment) and Articles 1103 or 1203 (most-favored-nation treatment).58

  33. With respect to cross-border trucking service, Annex I provides that a Mexican national will be permitted to obtain operating authority to provide cross-boundary trucking services in border states three years after the signing of NAFTA, i.e., December 18, 1995, and cross-border trucking services throughout the United States six years after the date of entry into force of NAFTA, i.e., January 1, 2000.

  34. With respect to investment, the phase-out deadline for the reservation was three years after the signing of NAFTA, i.e., December 18, 1995, for the establishment of enterprises providing trucking services for the transport of international cargo between points within the United States; and seven years after the date of entry into force of NAFTA, i.e., January 1, 2001, for the establishment of enterprises providing bus services between points in the United States.

  35. In the month prior to the December 18, 1995 deadline, both the Mexican and the U.S. governments were engaged in efforts to prepare for the lifting of the reservations contained in Annex I.

  36. A Land Transportation Standards Subcommittee had been formed as required by NAFTA Article 913(5)(a)(i) to implement a work program for making compatible the Parties' relevant standards-related measures for bus and truck operations. Under Annex 913.5.a-1, different deadlines, all based on the date of entry into force of NAFTA, were assigned for different tasks: (1) no later than a year-and-a-half for "non-medical standards-related measures respecting drivers, including measures relating to the age of and language used by the drivers;" (2) no later than two-and-one-half years for medical standards-related measures for drivers; (3) no later than three years for "standards-related measures respecting vehicles, including measures relating to weights and dimensions, tires, brakes, parts, and accessories, securement of cargo, maintenance and repair, inspections, and emissions and environmental pollution levels;" (4) no later than three years for standards-related measures respecting each Party's supervision of motor carriers' safety compliance, and (5) no later than three years for standards-related measures respecting road signs.59

  37. The work program contemplated that the Parties would make their standards-related safety measures compatible after the deadline for allowing cross-border trucking services in the border states. Also, under Article 904(3), a Party cannot apply standards-related measures in a discriminatory manner. 60

  38. "Starting before the entry into force of NAFTA and since, the governments of Mexico and the United States have actively worked to improve the coordination on the regulation of motor carriers."61

  39. These efforts included officials of the U.S. border states and Mexican border states, the Commercial Vehicle Safety Alliance and the International Association of Police Chiefs. The efforts involved training provided by the United States to Mexican officials in roadside inspections and hazardous material inspections, an education and media campaign to increase Mexican firms' awareness of U.S. safety regulations and increased federal funding to U.S. border states in order to enhance border inspection facilities.62 On August 22, 1991, Mexico became a full member of the Commercial Vehicles Safety Alliance (together with the United States and Canada).63 On November, 21, 1991, Mexico and the United States adopted uniform guidelines for roadside inspections and uniform standards for commercial drivers' licenses, and "for common standards on such criteria as knowledge and skills testing, disqualification, and physical requirements for drivers."64

  40. On September 5, 1995, United States Secretary of Transportation Peņa issued a press release announcing proposed measures for the "smooth, safe and efficient NAFTA transition." The press release stated, inter alia, that

    a team of state officials from the four U.S. border states and federal agencies was to be established with responsibilities for issues relating to the implementation of NAFTA's transportation provisions. The team was to meet through December 17, 1995, and beyond to 'ensure that operations will be as safe and efficient as possible.'

    a joint federal-state comprehensive safety compliance and enforcement strategy applicable to border states was to be implemented, designed to address problems that may arise as a result of increased number of trucks engaged in cross-border operations;

    a broad educational campaign was to be launched with the objective of disseminating information on motor carrier operating requirements in the United States, Mexico and Canada.
  41. On October 18, 1995, the ICC published in the Federal Register a proposed regulation entitled 'Freight Operations by Mexican Carriers - Implementation of North American Free Trade Agreement' The ICC published another notice in the Federal Register on December 13, 1995, "stating that the proposed regulations would be adopted as a final rule, to be effective on December 18, 1995,"65 the date of implementation of NAFTA's cross-border truck service provisions.

  42. The ICC regulations required Mexican, U.S. and Canadian applicants to certify that they had in place a system and an individual responsible for ensuring overall compliance with the Federal Motor Carrier Safety Regulations. To be issued operating certificates, the carriers had to comply with all USDOT safety regulations and with the ICC's insurance requirements.66 The procedures for obtaining authority to provide service between Mexico and the border states were to be identical to those in place for applicants from the United States and Canada, except that the application form for Mexican carriers was designated OP-1MX.67 

  43. On December 4, 1995, U.S. Secretary of Transportation Peņa stated at a joint U.S.-Mexico press conference that both the United States and Mexico were "ready for December 18."68 Then on December 18, 1995, Secretary Peņa issued a press release which stated that although Mexico and the United States were working to improve Mexican truck safety, because it was not yet a completed process, the United States would accept and process applications from Mexican trucking firms, but the applications would not be finalized. Therefore, no Mexican trucks have been allowed to pass out of the pre-existing commercial zones until the United States concludes consultations with the Mexican government. Through this refusal to finalize Mexican applications, the United States essentially continued the moratorium on Mexican trucks that had been in place prior to December 18, 1995.69

  44. The United States explained its actions were based on the alleged lack of safety in Mexican trucks, and referred to two alleged incidents involving Mexican trucks, one in November 1995 and the other in Fall 1995, where spillages of hazardous material had occurred. In the latter alleged incident, the driver of the Mexican truck was 16 years old, carried no insurance or shipping papers and the truck involved had faulty brakes and a number of bald tires. Mexico contends that these alleged incidents are not relevant to this dispute, because Mexico could have presented information on several incidents in which U.S. truck operators caused accidents while acting in breach of U.S. law.

  45. As well, in early December 1995, the GAO, the "investigative arm" of the U.S. Congress, made available to the USDOT its report on Mexican cross-border trucking. The report was officially released on February 29, 1996. The report stated that there were significant differences between United States and Mexican truck safety regulations. It reported that a Mexican truck inspection and enforcement program had been established, but was lacking the facilities and personnel to initiate it. They also reported that a large percentage of Mexican trucks operating in the commercial zones of the four U.S. border states failed to meet U.S. truck safety standards.70

  46. On December 12, 1995, thirty-two broad-based coalitions, including religious, labor and environmental groups sent a joint letter to President Clinton urging him to delay the implementation of NAFTA obligations which were to become effective on December 18, 1995.71 

  47. On December 15, 1995, the International Brotherhood of Teamsters, a U.S. trade union representing, inter alia, employees of some U.S. trucking companies, initiated a legal challenge to the ICC's proposed cross-border trucking services regulation. In late December 1995 (after the December 18 press release), the United States Court of Appeals for the District of Columbia declined to issue an emergency injunction applied for by the Teamsters on the basis of the U.S argument that no Mexican applications for operating authority would be processed in light of the Transportation Secretary's announcement. The case was briefed and argued by the parties in 1996 and then held in abeyance by the court pending a decision by the United States to implement NAFTA's cross-border trucking service provisions.

  48. On December 18, 1995, the date of implementation of NAFTA's cross-border truck service provisions, the United States Secretary of Transportation issued a second press release announcing, inter alia, that:

    Effective today, NAFTA parties will begin accepting applications from foreign motor carriers for the purpose of operating in international commerce in the Mexican and [United States] border states.72
    However, the Transportation Secretary stated that the final disposition of pending applications will be held until consultations between the United States and Mexico to further improve their motor carrier safety and security regimes have been completed. To date, the moratorium is still in place.

  49. The press release also announced that beginning December 18, 1995, Mexican citizens would be allowed to invest in U.S. carriers engaged in international commerce.

  50. Despite its assertions that Mexican citizens would be allowed to invest in U.S. carriers as of December 1995, to date the USDOT maintains a complete ban on Mexican nationals owning or controlling U.S. cargo and passenger motor carrier service providers. This ban is enforced by the application form for new operating authority, which requires that the applicant certify that the applicant is not a Mexican national, and the carriers are not owned or controlled by Mexican nationals. To gain approval of an application to acquire an existing motor carrier, the USDOT also requires that the applicant indicate whether the party acquiring rights is either domiciled in Mexico or the carrier is owned or controlled by persons of that country. These restrictions essentially ban any Mexican investment in U.S. carriers, because the applications would not be approved if they indicated Mexican ownership.73

  51. These statements pertaining to Mexican entities being involved in transactions are required under 49 C.F.R. § 1182.2(a)(10). It appears that there are no published or other formal announcements of the Department of Transportation that implement this restriction other than the application form itself. However, the operating restrictions imposed formerly by the ICC and currently by the USDOT in effect prevent new grants of operating authority to U.S. carriers owned or controlled by Mexican carriers.

  52. There has been no documentation of any further U.S. public announcements of or commentary on its decision not to implement NAFTA provisions at issue in these proceedings.

  53. As of July 20, 1999, the U.S. Department of Transportation had received 184 applications from Mexican persons to provide cross-border cargo service into the border states.74

  54. The fact that differences exist in the two domestic regulatory systems is not in dispute. In their submissions, both Mexico and the United States described in detail the U.S. trucking regulatory system, and the United States compared its system to the Mexican regulatory system to illustrate the differences. Both Mexico and the United States agree that the Mexican regulatory system is not identical to that of the United States. The disagreement is therefore whether the differences in the domestic regulatory systems justify the ban of the United States of Mexican trucks entering the territory.

  55. From December 31, 1995, until January 2000, the safety and economic aspects of motor carriers safety were regulated by the Federal Highway Administration ("FHWA"), which forms part of the United States Department of Transportation. Since January 1, 2000, jurisdiction over most motor carrier regulations is the responsibility of the newly created Federal Motor Carrier Safety Administration (FMCSA) within the USDOT.

  56. The USDOT grants motor carrier operating authority. The application procedure for operating authorities is based on a system of self-certification: interested trucking firms must certify that they are aware of and in compliance with all relevant safety regulations. Once a motor carrier operating authority has been granted, safety regulations are enforced through roadside inspections and compliance reviews at the company's place of business.

  57. The U.S. safety regulations are based on the Federal Motor Carrier Safety Regulations ("FMCSR"). The FMCSR regulate driver hour of service, driver logbooks, and other driver requirements like a minimum age, qualifications, knowledge of English, and understanding of highway traffic signs and signals. Drivers are also liable to be tested for controlled substances and alcohol. The commercial trucking equipment must include safety-related equipment and the motor carrier itself is under an obligation to inspect and maintain all commercial vehicles under its control. This obligation also includes the employment of personnel sufficiently qualified to carry out maintenance and inspection work.

  58. The FMSCA carries out both roadside inspections and on-site compliance reviews of trucking companies. The latter involves a review of safety related records kept on the premises of the truck company. Trucking operators receive a safety rating on the basis of these inspections and carriers assigned an 'unsatisfactory' rating may be prohibited from operating commercial motor vehicles.

  59. In order to maintain highway safety, the United States has taken a number of steps, which include putting in place a comprehensive system of rigorous vehicle and operator safety standards; imposing strict record keeping rules, and backing up those standards and rules with road side inspections, on-site audits and inspections and effective penalties; and a continuing commitment of enforcement resources and personnel. This system provides a high degree of assurance that the great majority of commercial trucks operating in the United States each day meets minimum U.S. safety standards.75

  60. A separate system of hazardous materials regulations, contained in the Hazardous Materials Regulations, exists.

  61. The United States explained that several of its key truck safety regulations and requirements are not incorporated in the Mexican carrier safety regulations. There is no regulation of driver hours of service, and apart from motor carriers carrying hazardous materials no requirement to maintain a driver logbook. There are no specific Mexican regulations governing the condition and maintenance of commercial truck safety equipment. Again, with the exception of vehicles transporting hazardous materials, Mexican trucks are not required to undergo periodical inspections.

  62. In respect to hazardous materials, the United States stated that the Mexican regulations follow closely the United Nations Recommendations for the Transport of Dangerous Goods but nevertheless significant gaps remained.

  63. The United States and Mexico therefore agree that there are substantial differences between the United States and Canadian regulatory systems and the Mexican regulatory system. For example, although Mexico does have in place some hazardous materials regulations, they do not provide detailed construction, inspection and operating requirements, such as the systems in the United States and Canada. Both Parties also agree that U.S. and Mexican transportation officials have been working together to enhance the Mexican safety regime and to develop cooperative exchanges.76

  64. Moreover, the United States observes that since 1995 it has been continuously undertaking efforts to improve the inspection facilities on the U.S. side of the border with Mexico. Special funds have been allocated to U.S. border states to increase inspection activities. The number of full-time inspectors at the border has been increased by a factor of three to a total of forty. The building of inspection facilities and cooperation between various agencies responsible for truck safety and related issues has also increased.

  65. Through the detailed descriptions of the domestic regulatory systems of the Parties, it was shown that there are differences in the systems, and that both Parties are working to harmonize them. However, the United States contends that these regulatory system differences justify their not allowing Mexican trucks into the U.S., while Mexico contends that internal regulatory systems are irrelevant to the operating authority of individual carriers in the United States.

  66. As explained in the Introduction, the focus of the dispute is what action is required by the Parties under the national treatment and most-favored-nation obligations of NAFTA (Articles 1202 and 1203, and Articles 1102 and 1103), and what Annex I reservations permit the Parties to do. Also central to the dispute is whether or not there are any exceptions in NAFTA which could justify the actions of the United States in failing to permit the cross-border trucking services by Mexican trucks carrying international cargo into the United States.

26 MIS at 15.
27 MIS at 15.
28 MIS at 15.
29 MIS at 15.
30 Memorandum of the President, Sept. 20, 1982, 47 Fed Reg. 41721 (Sept. 22, 1982), as referenced in Mexican Initial Submission at 16 (suspending the moratorium with regard to Canada). See also Memorandum of the President, Nov. 29, 1982, 47 Fed. Reg. 54053 (Dec. 1, 1982) (completely removing the moratorium with regard to Canada).
31 47 Fed. Reg. at 41721.
32 USCS at 5.
33 USCS at 5-6.
34 USCS at 6, citing 49 U.S.C.§ 13902( c)(4)(B).


USCS at 4-5.
36 MRS at 2-4.
37 MIS at 20-21.
38 49 C.F.R. § 372.241, as cited in MIS at 20.
39 49 C.F.R. § 372.241.
40 Transportation Equity Act for the 21st Century, Pub. L. No. 105-178, § 4031, 112 Stat. 418 (1998); 49 C.F. R. § 372.237.         
41 As of January 1, 2000, jurisdiction over most motor carrier regulation, which was the responsibility of the Federal Highway Administration, became the responsibility of the newly-created FMCSA. USCS at 8.
42 MIS at 22-23. See 49 C.F.R. Part 368 [Exhibit 30].
43 MIS at 23; USSS at 24-25.
44 USSS at 24. The Parties agree to the fact that trip insurance is required, but differ as to why trip insurance is required instead of continuous insurance. The United States denied that the use of trip insurance instead of continuous insurance "demonstrates that the United States has little interest in the safety of Mexican trucks operating in the commercial zones." Rather, "[a]n insurer's potential liability arising from trip insurance is just the same as that arising from continuous insurance, and in both cases the insurer has the same incentives to reduce its potential liability." (USSS at 24, 25). Mexico does not assert that the United States is unconcerned about safety compliance, but rather that the United States is satisfied with the safety of Mexican carriers and trailers. MIS at 70-78.
45 MIS at 21; USCS at 25-26.
46 MRS at 6.
47 USSS at 22.
48 USSS at 20-21.
49 USSS at 20.
50 MRS at 2-3.
51 MIS at 18.
52 USSS at 21-22.
53 USSS at 21-22.
54 USSS at 23.
55 The Parties disagree as to whether section 219 was instigated because of safety (U.S. contention) or to protect domestic carriers from competition (Mexican contention). The facts, however, are not in dispute. (See USSS at 23-24).
56 MRS at 7.
57 USSS at 25-26.
58 Annex I set out each Parties' reservations with respect to existing measures from the obligations imposed by Articles 1102 and 1202 and 1103 and 1203. It also set out commitments for immediate or future liberalization. The Annex I commitments oblige each party to liberalize specific sectors by dates set in the "phase-out" section of each reservation. MIS at 29. 
59 MIS at 31-32.
60 MIS at 32.
61 MIS at 33.
62 The United States dedicated $4.75 million in fiscal year 1999 and $7.75 million in fiscal year 2000 to improving the border enforcement activities. TR at 83.
63 MIS at 33.
64 MIS at 33.
65 MIS at 63.
66 60 Fed. Reg. 63981 (December 13, 1995).
67 MIS at 37.
68 MIS at 70.
69 MIS at 40-42.
70 USCS at 20. Although it is undisputed that the GAO report did provide this information on the Mexican regulatory system, Mexico contends that it is not relevant to the issue to be decided. Mexico contends that its domestic regulations do not have to be harmonized with the United States domestic regulations in order to permit individual Mexican carriers to cross into the U.S. border states.
71 USCS at 23, n.74.
72 U.S. Dept. of Transportation News, Remarks Prepared for Delivery: U.S. Secretary of Transportation Federico Peņa NAFTA Border Opening Remarks (Dec. 18, 1995), quoted in MIS at 42.
73 MIS at 26.
74 MIS at 43.
75 USCS at 47.
76 USCS at 3, 44.