WITH President Donald Trump continuing his efforts to renegotiate the North American Free Trade Agreement (NAFTA) – even as Senate Republicans call for talks to end by Labor Day – Canadian, American and Mexican trucking associations are calling for modernization, not a complete overall, of NAFTA.
They presented their joint case during a presentation on “Cross-border Trucking in the Age of an Uncertain NAFTA” at the 70th annual National Tank Truck Carriers conference in Toronto, Ontario.
“We strongly encourage our governments to update NAFTA to keep North America competitive internationally,” said the Canadian Trucking Alliance (CTA), American Trucking Associations (ATA) and La Cámara Nacional del Autotransporte de Carga (CANACAR) in a joint statement.
“In this endeavor, making border crossings and rules governing international commercial transportation more efficient is a crucial element that will only help our industries make North America stronger. We look forward to working with our governments to achieve a better NAFTA.”
Trump’s determined to handle NAFTA his own way.
He moved forward with tariffs on steel and aluminum from Mexico and Canada in early June, prompting both of the United States’ NAFTA trade partners to retaliate with their own tariffs on US exports – which is exactly what the country’s trucking associations didn’t want to see happen.
The three associations are interconnected through NAFTA, and developments that harm one, harm them all.
“We’ve had chats with the Canadian officials, and a lot of the stuff we’re dealing with on customs- and market-access levels aren’t really being dealt with now, because of the high-level issues, like rules of origin and tariffs,” said Lak Shoan, director of policy and industry awareness for the Ontario Trucking Association (OTA).
“It’s really in a holding position at this time.”
In the trucking associations’ combined NTTC presentation, which featured Shoan; Geoff Wood, vice president of operations and safety for CTA and OTA; and Bob Costello, ATA’s chief economist and senior VP, they pointed out that 10 million trucks cross the Canada-US border every year.
Those trucks move 90 percent of all consumer products and food, and two-thirds of Canada’s trade with the US, contributing a staggering 1.2 percent to Canada’s overall gross domestic product (GDP).
CTA said Canadian trucking fleets experienced substantial growth as a result of NAFTA, which took effect Jan. 1, 1994, including 140,000 Canadian drivers now operating in the US – or close to half of all truck drivers in Canada.
In Southern Ontario alone, four bridges to the US carry 70 percent of the Canada-US trade.
“You have $1 billion a day worth of NAFTA trade crossing Canada and US borders, so it’s going to be vitally important to keep a NAFTA agreement in place,” Shoan said. “And obviously if you have an agreement that’s been in place for 24 years, there are opportunities to modernize and tweak that.”
In fact, more than 40 percent of Canada’s GDP depends on US trade, and more than 70 percent of what Canada produces is destined for the US.
And like free trade, it goes both ways.
According to a study by the Canadian Embassy, 9 million US jobs are linked to trade with Canada.
“NAFTA has been very good for the trucking industry over the last 24 years,” Shoan said.
Raw materials, parts, components and services account for 78 percent of US imports from Canada, and US inputs account for $70 billion, or 8.5 percent, of the total value of Canadian manufacturing output.
And the automotive manufacturing industry is a prime example of how well NAFTA works already, clearing the way for the many crossings required to complete assembly of multiple parts and accessories.
“You can get brake lights from Mexico and a car transmission from Canada, and other parts coming from the US, and those parts can cross the border up to eight times before you have a completed vehicle,” Shoan said.
In the tank truck world alone, numerous products, including food, travel freely across borders.
That’s why all three trucking associations insist the US “do no harm to this mutually beneficial relationship.”
Canada’s trucking associations suggested several ways to modernize – and not completely scrap – the NAFTA agreement, to try to create new efficiencies, including pre-clearance, border program harmonization reviewing border fees, making in-transit movements program permanent and one-stop-shop inspections.
“We’re working on seeing if there are any synergies between all three of our countries, from a CTA, ATA and CANACAR perspective, and we’re really trying to work together to see if we can create some type of trilateral agreement to present to negotiators,” Shoan said.