[Federal Register Volume 60, Number 201 (Wednesday, October 18, 1995)]
[Proposed Rules]
[Pages 53894-53906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25773]
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INTERSTATE COMMERCE COMMISSION
49 CFR Parts 1043 and 1160
[Ex Parte No. 55 (Sub-No. 96)]
Freight Operations by Mexican Motor Carriers--Implementation of
North American Free Trade Agreement
AGENCY: Interstate Commerce Commission.
ACTION: Proposed rules.
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SUMMARY: The purpose of this Notice is to announce implementation of
the provisions of the second phase of the North American Free Trade
Agreement (NAFTA) relating to land transportation, and to promulgate
rules and develop an application form required to carry out the
provisions. Under existing law, effective December 18, 1995, the
Commission will process applications filed by Mexican motor carriers of
property for operating authority to provide service across the United
States-Mexico international boundary line to and from points in
California, Arizona, New Mexico, and Texas, and by persons of Mexico
who establish enterprises in the United States seeking to distribute
international cargo in the United States.
DATES: Comments must be filed by November 7, 1995.
ADDRESSES: An original and 10 copies of comments referring to Ex Parte
No. 55 (Sub-No. 96) must be sent to: Interstate Commerce Commission,
Office of the Secretary, Case Control Branch, 1201 Constitution Avenue,
N.W., Washington, DC 20423.
FOR FURTHER INFORMATION CONTACT: Bernard Gaillard, (202) 927-5500 or
Stanley M. Braverman, (202) 927-6316. [TDD for the hearing impaired:
(202) 927-5721.]
SUPPLEMENTARY INFORMATION: Section 6 of the Bus Regulatory Reform Act
of 1982 (codified at 49 U.S.C. 10922(m)) imposed a 2-year moratorium
(subject to renewal) on the Commission's issuance of new grants of
operating authority to motor carriers domiciled in or owned or
controlled by persons of Mexico or Canada. Under this statute, the
President has the authority to remove or modify the moratorium if he
determines it to be in the national interest, i.e., if overriding
economic or foreign policy considerations make such an action
advisable, or if a negotiated settlement with one country or the other
can be reached. Under the moratorium, the President must notify
Congress in writing 60 days before the date on which the removal or
modification is to take effect.
Shortly after the moratorium went into effect, the President
exercised his authority and removed the moratorium with respect to
Canada. The President indicated in a memorandum to the United States
Trade Representative that the United States and Canada had reached a
bilateral understanding that would ensure fair and equitable treatment
for both U.S. and Canadian motor carriers on both sides of the
international boundary line. 47 FR 54053 (1982).
The moratorium remained in place for Mexican motor carriers because
the Mexican Government continued to restrict U.S. motor carriers'
access to Mexico. The moratorium prohibits Mexicans from seeking
operating authority that carriers of other nations can obtain.1
\1\The moratorium does not entirely bar Mexican carriers from
operating in the United States. Pursuant to the provisions of 49
U.S.C. 10922(m) and 10530, Mexican carriers may operate in the
United States, but only in United States border commercial zones,
and only pursuant to certificates of registration known as ``MX
certificates.''
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NAFTA was signed on December 17, 1992. It ``entered into force''
(i.e., it took effect) on January 1, 1994. NAFTA contemplates that the
moratorium on Mexican motor carriers will be lifted in phases, and that
restrictions imposed by the Mexican government on U.S. carriers
operating in Mexico will be similarly relaxed.2 The phases are as
follows:
\2\The NAFTA schedule of liberalization does not remove all
limitations on Mexican motor carrier operations in the United
States. The moratorium will remain in place for Mexican carriers in
the one area that was not liberalized, namely, point-to-point
carriage of domestic cargo in the United States. This means that
Mexican property carriers will be able to operate only in
international commerce (between points in the United States and
points in Mexico), but they will not be able to engage in
transportation between points in the United States.
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1. The first phase of NAFTA granted access to Mexican charter
and tour bus operators to provide international transportation
service between Mexico and all points in the United States;3
\3\In Passenger Operations By Mexican Carriers--NAFTA, 9
I.C.C.2d 1258 (1993), we crafted a special authorization for
international charter and tour bus service.
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2. Three years after signature (December 17, 1995), NAFTA
provides for access by Mexican motor property carriers into United
States border States, and establishment of
[[Page 53895]]
companies to distribute international cargo within the United
States;4
\4\Because December 17, 1995 falls on a Sunday, we will begin
processing applications on Monday, December 18, 1995.
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3. Three years after entry into force (January 1, 1997), NAFTA
provides for access by Mexican regular-route passenger carriers to
perform international service to all points in the United States;
4. Six years after entry into force, NAFTA provides for access
for cross-border operations by Mexican motor property carriers to
all points in the United States; and
5. Seven years after entry into force, NAFTA provides for bus
services by Mexican carriers between points in the United States.
Pursuant to 49 U.S.C. 10922(m)(2)(A), the President notified
Congress, on November 4, 1993, in a Statement of Administrative Action
to Implement NAFTA, of his intention to modify the moratorium in
conformity with the entry phases of NAFTA. We are thus instituting a
rulemaking proceeding, in anticipation of the President's specific
modification of the moratorium, to implement phase 2 of NAFTA, which
governs international cargo transportation between the U.S.-Mexico
international boundary and points in the four U.S. border States, as
well as the distribution and transportation of international cargo by a
Mexican-owned or controlled company based in the United States.
We will require operating certificates for private as well as for
for-hire Mexican carriers of property (including exempt
commodities),5 because the current moratorium on grants of
authority to Mexican carriers clearly includes Mexican private carriers
and carriers of exempt commodities. Indeed, the phase 2 NAFTA entry
provisions, which contemplate a partial lifting of the moratorium,
define ``truck services'' as including for-hire, private, or exempt
services. North American Free Trade Agreement, January 1, 1994, Annex
I--United States (1-U-19); see also North American Free Trade Agreement
Implementation Act (Dec. 8, 1993), Pub. L. No. 103-182, 107 Stat. 2057,
190 U.S.C.S. 3301 (1993).
\5\These certificates may be obtained through the filing of an
``OP-1MX Application form'' for Mexican carriers.
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Because NAFTA is designed to provide simultaneous access to each
country's border States for international shipments and to allow the
establishment of carriers to carry international cargo, reciprocal
treatment in practice must be achieved. Accordingly, to guard against a
failure to adhere to the NAFTA principles of reciprocal access for U.S.
carriers in Mexico, the Commission will issue conditional grants of
authority to Mexican applicants (common carriers, contract carriers,
private carriers, household goods carriers, and companies established
to distribute international cargo within the United States). The
certificates that we issue to Mexican motor carriers will usually be
framed to authorize service:
Over irregular routes, in foreign commerce, transporting general
and exempt commodities (with the usual exceptions), between ports of
entry on the international boundary between the U.S. and Mexico, on
the one hand, and on the other, points in California, Arizona, New
Mexico, and Texas.
Condition: The duration of this grant is subject to the
condition that U.S. carriers obtain reciprocal access in Mexico.
This certificate will terminate 30 days after service of a
Commission decision finding that reciprocal access has not been
granted by Mexico.
The Commission, on its own motion or on petition by interested
persons, may initiate a proceeding to determine whether Mexico has
failed to grant reciprocal access. The U.S. Department of
Transportation (DOT) will be invited to participate in any such
proceeding. Upon a determination by the Commission that reciprocal
access in Mexico has been denied, the conditional grants of authority
to Mexican carriers would be terminated.6
\6\ Reciprocal treatment does not require the establishment of
identical entry procedures in both countries. Rather, NAFTA simply
mandates reciprocal access in the territories of both countries.
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Petitions to invoke the termination of these grants of authority
will not be entertained in the absence of allegations of comprehensive
efforts by Mexico to deny or discourage entry into or establishment of
transportation operations within that country. All terminated grants
would be reinstated upon a finding in a subsequent proceeding that
reciprocity has been achieved.
In general, the application procedures and regulations that apply
to United States for-hire carriers will also apply to Mexican
carriers.7 For example, to be issued operating certificates in
accordance with current law, carriers must abide by all DOT safety
regulations, comply with the Commission's insurance requirements (49
U.S.C. 10927, 49 CFR Part 1043), publish and file with the Commission
applicable tariffs (49 U.S.C. 10761, 10762), and file with the
Commission agents for service of process (49 U.S.C. 10330). After
initiating service, carriers must maintain compliance with DOT's safety
fitness standards. Failure to do so will result in the revocation of
the authority.
\7\See 49 CFR Part 1160, along with the proposed amendments
required to implement phase 2 of NAFTA.
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Attached as Appendix A is the proposed OP-1MX Application and the
instructions on how it should be completed. The application is designed
to collect information from Mexican applicants seeking operating
authority to conduct private and for-hire motor carrier cross border
operations (including the carriage of exempt commodities) into and from
the four United States border States, and for Mexican-owned or
controlled enterprises established in the United States to transport
international cargo in foreign commerce.
We believe that a separate application form designed to authorize
this phase of NAFTA service will help to avoid confusion and errors,
thereby improving the speed and efficiency of the application
processing. At the request of the Federal Highway Administration, our
application forms will alert applicants to the safety fitness
conditions imposed on all certificates by the Commission in Safety
Fitness Policy, 8 I.C.C.2d 123 (1991), and will require a certification
that the applicant can produce records demonstrating compliance with
the Federal Motor Carrier Safety Regulations and the Hazardous
Materials Transportation Regulations. Because certain Mexican carriers
may want to file ``OP-2'' Forms seeking authority to operate only in
U.S. border commercial zones under the more limited MX certificates,
rather than operating under the broader conditional licenses
contemplated here, we will continue to process requests for MX
certificates, unless Congress amends or repeals section 10530.
We will provide a short comment period to enable interested persons
to submit written views, arguments, or representations. Comments filed
with the Commission must be identified as such and must comply with the
requirements for filing pleadings specified at 49 CFR 1104.1-1104.3.
Pursuant to 5 CFR 1320.5(a)(iv)(A)(6), comments may also be filed with
the Office of Management and Budget, Office of Information and
Regulatory Affairs, Washington, D.C. 20403.
Regulatory Flexibility Act
Under the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., we
have examined the impact of this proposed action on small businesses
and small organizations. We expect that the new application form
designated for Mexican applicants (Form OP-1MX), and the corresponding
regulations, will simplify and clarify the application process. Use of
the existing Form OP-1 for these new
[[Page 53896]]
applications, by contrast, would cause confusion and would require more
work on the part of Mexican carrier applicants. Therefore, the proposed
action should reduce paperwork burdens on small businesses.
Paperwork Burden Analysis
We have submitted notice of this rulemaking and the new application
Form OP-1MX, entitled Application for Operating Authority by Mexican
Carriers Provided by the North American Free Trade Agreement, to the
Office of Management and Budget (OMB) for review under Section 3504(h)
of the Paperwork Reduction Act of 1980 [44 U.S.C. Chapter 35]. The form
is designed to collect information from Mexican carriers to allow the
Commission to evaluate whether an operating authority proposal meets
the Commission's standards for granting certificates of authority.
We estimate that an average of 1.5 burden hours will be required to
complete the proposed form. The Commission estimates it will receive
approximately 18,800 applications each year for a total of 28,200
burden hours. The estimated burden hours include time for reviewing
instructions, gathering and maintaining the needed data, and completing
and reviewing the collection of information.
Environmental and Energy Considerations
We conclude that the rules proposed here will not significantly
affect either the quality of the human environment or the conservation
of energy resources.
List of Subjects
49 CFR Part 1043
Insurance, Motor Carriers, Surety Bonds.
49 CFR Part 1160
Administrative practice and procedure, Brokers, Buses, Freight
forwarders, Maritime carriers, Motor carriers, Moving of household
goods.
Decided: October 12, 1995.
By the Commission, Chairman Morgan, Vice Chairman Owen,
Commissioners Simmons and McDonald.
Vernon A. Williams,
Secretary
For the reasons set forth in the preamble, title 49, chapter X,
parts 1043 and 1160 are proposed to be amended as set forth below:
PART 1043--SURETY BONDS AND POLICIES OF INSURANCE
1. The authority citation for part 1043 continues to read as
follows:
Authority: 49 U.S.C. 10101, 10321, 11701, 10927; 5 U.S.C. 553.
Sec. 1043.1 [Amended]
2. Section 1043.1 paragraphs (a)(1) and (b) are amended as follows:
a. In paragraph (a)(1) add the words ``or foreign (Mexican) motor
private carrier or foreign motor carrier transporting exempt
commodities'' after the words ``No common or contract carrier''.
b. In paragraph (b) add the words ``nor any foreign (Mexican)
common carrier of exempt commodities'' after the words ``title 49 of
the U.S. Code''.
PART 1160--RULES GOVERNING APPLICATIONS FOR OPERATING AUTHORITY
3. The authority citation for part 1160 continues to read as
follows:
Authority: 5 U.S.C 553 and 559; 16 U.S.C. 1456; 49 U.S.C. 10101,
10305, 10321, 10921, 10922, 10923, 10924, 10928 and 11102.
4. In Sec. 1160.1 a new paragraph (h) is added to read as follows:
Sec. 1160.1 Applications governed by these rules.
* * * * *
(h) Applications for Mexican carriers to operate in foreign
commerce as common, contract or private motor carriers of property
(including exempt items) between the U.S./Mexico border, and points in
California, Arizona, New Mexico and Texas.
Sec. 1160.3 [Amended]
5. In Sec. 1160.3, paragraph (a), remove the word ``and'' after the
words ``of household goods;''; add the words ``and Form OP-1MX for
Mexican motor property carriers'' after the words ``for water
carriers''.
Sec. 1160.4 [Amended]
6. Section 1160.4, paragraphs (a)(1) and (d) are amended as
follows:
a. In paragraph (a)(1) add the words ``, Mexican motor property
carriers that perform private carriage and transport exempt items,''
after the words ``(except household goods)''.
b. In paragraph (d) introductory text add the words ``, including
Mexican carrier applicants'' after the words ``household goods
applications''.
c. In the Note at the end of Sec. 1160.4 add the words ``Form OP-
1MX for Mexican property carriers,'' after the words ``OP-1 for motor
property carriers,''.
7. In Sec. 1160.5 a new paragraph (a)(8) is added to read as
follows:
Sec. 1160.5 Commission review of the applications.
(a) * * *
(8) All applications must be completed in English.
* * * * *
Note: The following appendix will not appear in the Code of
Federal Regulations.
BILLING CODE 7035-01-P
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Appendix A--OP-1 MX Application
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[FR Doc. 95-25773 Filed 10-17-95; 8:45 am]
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