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America’s Downward Spiral in 2017

Posted by on in NAFTA

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We are now four and a half months into the Trump presidency. While the president has not been able to achieve any significant legislative successes, he has been able to accomplish something much more far-reaching. He has managed to undo decades of American policy and dramatically reduce the country’s stature in the world. How do we make sense of Trump’s strange journey so far? These are my thoughts.

Donald Trump received 62 million votes in last year’s election. These votes did not come from a homogeneous base of voters. Rather, they came from the following groups.

Loyal Republican Voters

There are American citizens who vote for the Republican candidate in every election. While Donald Trump may have not been the preferred candidate for all Republican voters, the people who typically support this party voted predominantly for him. They expect him to uphold traditional Republican party values.

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Today, the Prime Minister of Canada met with the President of the United States (#TrudeaumeetsTrump) for the first time. For President Trump, it was one in a series of meetings and phone calls that he has had with foreign leaders. For many Canadians, the question was where Canada ranks with America’s new president on trade and NAFTA.

The NAFTA agreement that was signed in 1994 between the United States, Canada and Mexico, has helped strengthen the ties between the three countries. There are nine million Americans whose jobs rely on the movement of goods from the United States to Canada. Most Canadians know that America is the number one market for Canadians goods and that Canada is the number one market for exported goods from thirty-five states. About 74% of Canadian goods are exported to the USA; 18.3% of American made goods go to Canada. The dollar value is about same. There is almost $2 billion in Commerce that takes place between the two countries on a daily basis.

In addition to these key issues, this was also an opportunity for the two leaders to set the tone for the years to come. Canadians put a high value on their relationship with the United States. They understand that we are and have been best friends, neighbours and allies. We have worked with Americans and fought beside Americans in a variety of wars.

The headlines in the Canadian media have identified that Canadians had a certain level of “anxiety” as PM Trudeau boarded a flight to Washington. During the election campaign, Donald Trump talked about “tearing up” the “terrible” NAFTA deal. From a transportation industry perspective, “trucks haul two-thirds by value of Canada-U.S. trade; anything that might disrupt that trade – whether it’s about scrapping NAFTA, a border tax, or further layers of border security – is of a real concern to us,” says David Bradley, Chief Executive Officer of the Canadian Trucking Alliance. “Moreover, anything that thickens the border and makes supply chains less reliable and predictable would have a profound impact on the competitiveness of both countries.”

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Canada Needs to Prepare for Negotiations on NAFTA

Posted by on in NAFTA

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The North American Free Trade Agreement (NAFTA), came into effect on January 1, 1994, creating the largest free trade region in the world. It was designed to generate economic growth and help raise the standard of living for the people of all three member countries.

“By any measure the NAFTA has been a success by serving as a basis to grow both trilateral and bilateral North American relationships and the results speak for themselves. This integration helps maximize our capabilities and make our economies more innovative and competitive. In 1993, trilateral trade within the North American region was over US$288 billion. In 2015, our total trilateral merchandise trade amounted to over US$ 1.0 trillion.” (Source: Government of Canada Global Affairs Canada website). This is a more than threefold increase since 1993.

During the recent US election, Bernie Sanders and Donald Trump frequently spoke about the need to renegotiate NAFTA. They commonly highlighted the impact that “bad trade deals” as they were framed, had on American industry. As the election campaign unfolded, Hillary Clinton fell into line with her opponents on this issue. While the subject of renegotiating NAFTA has come up before, this time will likely be different. Here’s why.

Donald Trump has already stated that one of his major priorities is to create jobs in America. He campaigned with the slogan “Make America Great Again.” A big part of making America great again is bringing back jobs that were lost to other countries. This message resonated strongly with working class people living in “rust belt” states. In fact, the race for the Presidency was decided in Michigan, Ohio, Pennsylvania and Wisconsin. These states turned their backs on the Democrats and voted for Donald Trump. To maintain the support of working class Americans in these states, Mr. Trump will have to demonstrate that he is trying to bring back jobs to these states. To better understand the challenges of people living in cities in this area, who have lost their jobs, I encourage everyone to read Hillbilly Elegy by J.D. Vance (see my blog on the book http://www.dantranscon.com/index.php/blog?view=entry&id=253 ).

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This is the sixth and final blog in this series on surface freight transportation within Canada and between Canada and the United States. In this blog I will focus on tips for carriers to help achieve success in the Canadian freight market.

Is the Canadian Freight Market Worth the Investment?

As outlined in the first blog in this series, Canada is a large country, from a geographic perspective, with a population about the size of the state of California. The first question that any American carrier should ask is whether or not Canada is worth the investment in time and resources. As outlined through this series of blogs, when dealing with Canada, there is much to learn about Canadian laws, customs clearance, exchange rates and a host of other issues. Is serving the Canadian market of strategic importance to your company or would another US market (or foreign market) be more profitable? If there is value in the Canadian market, there are a series of steps that need to be undertaken.

Educate yourself on your Canadian freight activity and Canadian carriers

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The first four blogs in this series looked at the fundamentals of road and rail transportation within Canada and between Canada and the United States. This blog will focus on a set of Best Practices in Canadian Freight Transportation. Here are a few thoughts to consider if you wish to be proficient in this area.

Educate yourself on your Canadian domestic and cross-border freight

As a starting point, learn as much as you can about your Canadian customers and vendors. It is essential to study the density and packaging of the freight, the proximity of your Canadian customers to rail, truck, air and port facilities and to the closest border crossings. The density of freight moving within the United States and between the US and Canada may differ. Canadians may buy more of your light bulbs and less of your lawn mowers.

Canadian LTL and parcel carriers are very focused on the density of the products being moved. To ensure you pay the lowest rates possible, you need to be fully informed on the characteristics of the freight you manage.

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