Enhancing competitiveness and connectivity: The new US-Mexico air services agreement

Abstract

Beginning this year, U.S. cargo and passenger airlines will have an opportunity to compete for a bigger share of freight trade and traffic between the U.S. and Mexico. This opportunity will occur as a result of the new Air Services Agreement (ASA) between the U.S. and Mexico that took effect in January, 2016. This ASA further elevates and strengthens the dynamic commercial and economic relationship between the United States and Mexico by facilitating greater trade and tourism. It is a key element of the U.S.-Mexico High Level Economic Dialogue (HLED) that aims to promote competitiveness and connectivity, foster economic growth, productivity and innovation, and partner for regional and global leadership (U.S. Department of State 2014). This paper (i) explains the genesis and impact of HLED, (ii) provides a brief historical perspective on air services agreements in general and freedoms of the air, (iii) summarizes the major principles of the previous US-Mexico ASA of 1960, as amended in 2005, (iv) outlines the essential elements of the new US-Mexico ASA that is scheduled to take effect in January 2016, (v) describes the likely effects of the new ASA on regional and global air cargo traffic and supply chains, and lastly (vi) provides some directions for future scholarly research.