NORTH AMERICAN RAILROADS URGED TO STANDARDIZE RULES UNDER NAFTA

NORTH AMERICAN RAILROADS URGED TO STANDARDIZE RULES UNDER NAFTA

Railways hoping to compete under the North American free-trade agreement should establish uniform regulations like those proposed for the European Community, a senior Canadian rail executive suggested.

Conflicting sets of regulations and standards will drive up the costs of transportation and, ultimately, the costs of North American goods, according to Katherine Braid, senior vice president, legal services and strategic development, CP Rail System."Any extra costs may make the North American trading zone less competitive against Far Eastern countries or the European trading zone," Ms. Braid told the 7th annual American Railroad Conference, held in New Orleans last week.

She stressed that "regulatory controls should be eliminated in all jurisdictions where there is sufficient intramodal or intermodal competition to allow the marketplace to regulate the industry."

Ms. Braid said that in the European Community a multimodal network that crosses national boundaries without restraint, linking road, rail and waterways, is taking shape. At the same time, she said, the EC is developing a policy and regulatory framework to make such an integrated system work.

"CP Rail System would like to see the railroad industry (in North America) dealt with in a way similar to that proposed for Europe under the European Community regulations - for safety standards, equipment standards, custom and excise duties, use of employees, as relationships between carriers and relationships between carriers and shippers."

Under the proposed Nafta, the United States, Canada and Mexico have six years to align their safety, work force and equipment standards for rail, trucking and bus operations.

Reiterating a view shared by the Canadian railway industry as a whole, Ms. Braid said "Canada needs to integrate its fiscal, transportation and environmental policies with those in place in the U.S."

"We will also have to harmonize our laws regarding investment in transportation undertakings. In Canada, for example, an acquisition of a controlling interest in a railway worth more than $5 million either by U.S. or Mexican interests would be subject to three different review procedures."

As a carrier with a network in the United States and Canada, CP Rail works under two sets of transportation laws - the 1980 Staggers Act in the U.S. and the 1987 National Transportation Act in Canada.