Delivery Services Need an Updated NAFTA, Lobbying Group Says

Courier and delivery services could greatly benefit from a modernized NAFTA, the Coalition of Services Industries said in a report released Feb. 21. The lobbying group said negotiations are in a critical stage, and if the U.S. withdraws from the agreement -- as President Donald Trump has repeatedly threatened -- services industries are among the groups that will be hurt most. The services coalition said NAFTA could change rules on cross-border trucking and Mexico's requirements to use Mexican brokers.

The coalition hopes a new agreement will raise de minimis levels in Canada and Mexico, which are currently $20 and $50, respectively. Raising those levels could help e-commerce sales from U.S. suppliers into those countries. "A withdrawal from NAFTA allows Canada and Mexico to continue to unfairly protect their brick and mortar retailers from the competition U.S. 'e-tailers' seek to offer, and [forgoes] the chance to remove these barriers to increase U.S. exports," the report said. "Without NAFTA, U.S. goods will face an average tariff of 7.1% in Mexico and 4.2% in Canada. But many of the goods carried by delivery service members will encounter much higher tariffs, over 15%."

The group calls for a modernized "sectoral services annex dealing with anti-competitive postal practices in line with modern U.S. agreements that is absent from the original NAFTA agreement." UPS argued in arbitration for years that Canada Post is given more favorable customs treatment than is given to UPS and other foreign courier services, and that Canada had breached breached NAFTA articles that cover monopolies and state enterprises. It lost on all counts in 2007.