NAFTA Cross-Border Activities

1. NAFTA Cross-Border Activities John Gray, FMCSA Jan Balkin, TML/NADSF 2006 Audit Workshop

2. NAFTA Overview • 1982 – Congressional moratorium on USDOT grants of authority to Mexican and Canadian carriers • 1992 – US/MX/CN sign NAFTA • 1995 – Operations throughout border states • 2000 – Operations throughout US 2006 Audit Workshop

3. US/Mexico Truck Traffic on US Highway Network, 2020 (Tons) Federal Highway Administration Office of Freight Management and Operations 2006 Audit Workshop

4. Ground Transportation - Responses • Purchase majority ownership in Mexican companies • Interline agreements • FMCSA accepted Mexican carrier applications for US authority but did not act on them • Additional congressional requirements imposed for safety considerations 2006 Audit Workshop

5. Ground Transportation - Responses • 2001: USDOT begins planning for eventual opening – Working Group • Collaboration with Canada, Mexico, States, IRP/IFTA organizations • Formation of Working Group 2006 Audit Workshop

6. NAFTA Fuel Tax and Registration Working Group • US Border States of Arizona, California, New Mexico, Texas • IRP Inc. • IFTA Inc. • USDOT • Secretariat of Communications & Transportation (USDOT-equivalent)/Economía (Commerce Dept-equivalent)/Hacienda (Treasury Dept-equivalent) • Transport Canada 2006 Audit Workshop

7. How the Working Group Fits In • Facilitate cross-border operations • Based on 3-step framework • Long-term – Mexico joins IRP and IFTA • Interim – Mexican carriers base in border states • Short-term – Trip permit operations 2006 Audit Workshop

8. Principles Adopted • Pursue vision of 3-step process • Develop timelines • Recognize constitutional and legislative limitations of each entity 2006 Audit Workshop

9. Principles Adopted • Consistent with provisions of NAFTA, no impediment to commerce • No single state bearing an unreasonable administrative or financial burden on implementation 2006 Audit Workshop

10. Schedule Targets • Interim solution: Summer 2006 (for planning purposes) 2006 Audit Workshop

11. US Operational Issues Discussed • Assignment of Mexican registrants (IRP), licensees (IFTA) • Credentialing of Mexican carriers 2006 Audit Workshop

12. Operational Issues, continued • Audit requirements • Fee/Tax Collections 2006 Audit Workshop

13. Address operational issues to be implemented • Here to listen to audit discussions • Identify common concerns that may affect border states’ audit activities of Mexican carriers • Take back to Working Group to identify additional training, educational opportunities 2006 Audit Workshop

14. Next Steps • Internal state preparations • Continued collaboration between USDOT/SCT/TC • Training and educational opportunities for Mexican carriers (use MX SCT, carrier “chambers” (trade associations) • Track account volumes • Evaluation component 2006 Audit Workshop

15. Summary • Working toward interim solution • Continue US/Mexico/Canada cooperation • Address other issues as they arise • Be prepared to implement when border opens officially 2006 Audit Workshop

16. 2006 Audit Workshop

17. 2006 Audit Workshop