Canada is a trading nation. We have to be. Our domestic market is simply too small to sustain our standard of living. We are good at producing some things. We are blessed with an abundance of the natural resources – regardless of the recent softness in commodity markets – the rest of the world needs. But, we do not produce much of the everyday consumer goods demanded by a modern society. Those things need to be imported.
Notwithstanding the fact trade increases the overall welfare of economies, it can be disruptive, particularly for those engaged in economic activity best undertaken by somebody, or somewhere, else. Trade is being blamed for everything from terrorism to the destruction of the middle class.
Nowhere is the antipathy towards trade more apparent than in the US – Canada’s largest trading partner for the past 100 years and likely to be forever so, regardless of efforts to expand our presence in the emerging Asian markets and elsewhere.
Over 40% of Canada’s GDP is dependent upon trade with the US. Over 70% of what Canada produces is destined to the US. The biggest chunk of Canada-US trade is intra-corporate, reflecting the integrated nature of our economies.
Anything that negatively impacts or restricts access to the US market is bad for Canada. Trucking has been a chief beneficiary of the explosion in trade between the three NAFTA countries and for Canadian truckers in particular, the trade between Canada and the US.
At the time of writing, the US federal election was mercifully heading into the home stretch. By the time you read this, a new president will have been elected. You can’t rely upon what politicians say during elections, but both candidates said more than enough about NAFTA to raise concerns. Donald Trump was most vociferous, calling NAFTA a disaster, the worst deal in history, and promising to rip the agreement up if he couldn’t negotiate better terms. Hillary Clinton’s position on NAFTA was, well, a little harder to pin down. Historically, she has been a NAFTA supporter, but during the campaign she was equivocal, also suggesting the agreement needed to be reviewed.
They say all politics are local. I get it. So, we maybe need to take all of this with a grain of salt. But, Canadians must – for our own self-preservation – constantly try to make the case that trade with Canada is good for the US too.
I have spent a considerable amount of time over the past 20 years talking trade and the need for balance between security and trade to business groups and think tanks all over the US. My message has always been: Like any good relationship it’s a two-way street. Among all the countries and trade blocs in the world, Canada is the US’s single largest customer. Canada buys more US goods than any of the EU, China, or India. And, it’s not just the northern border states that sell to Canada. Canada is the number one export market for at least 70% of the states.
I am under no illusion as to the limits of my powers of persuasion, regardless that I personally always felt my message was well received. The reality is that it is a huge struggle for Canada to be heard on these issues. We have to work with organizations and groups in the US who share our values and concerns to make the case. We need partners.
The American Trucking Associations (ATA) is such a partner for us at the Canadian Trucking Alliance. The two organizations have enjoyed a long, productive and cooperative relationship on trade/border issues, even though in the grand scheme of things such issues are much more top of mind to the typical Canadian carrier than they are for their US counterparts. That’s just a reflection of the differences in our marketplaces.
I had the good fortune to hear Chris Spear, the new president of ATA, extoling the virtues of free trade and NAFTA in his first official address to his members last month.
Given the timing of his speech – during the height of the US election campaign – it would have been easy to avoid the topic of trade. Instead, he raised concerns over both candidates’ suggestions of a possible re-opening of NAFTA.
“Let me be clear. Trade and trucking are synonymous; For NAFTA alone, trucks are the most heavily used mode for moving goods to and from the United States and its NAFTA partners Mexico and Canada,” he said. He warned that “any attempt to re-open or threaten this long-standing agreement could have dire repercussions on our industry.”
Shortly thereafter, ATA released a new infographic entitled, Trade Moves North America Forward, which makes the point that the 168% increase in the value of goods traveling by truck across the Canadian and Mexican borders, “has created or supported tens of thousands of jobs in the US, with motor carriers, suppliers and shippers, underscoring the benefits of free trade.”
US exports to Canada by truck are up 80% since 1995, with 70% of the goods (by value) involved in Canada-US bilateral trade moving by truck. That sort of support for trade, and for NAFTA specifically, reflects true leadership and is the basis for a strong partnership which will be critical in the months and years ahead. In North America, we need to build bridges, not walls.
David Bradley is CEO of the Canadian Trucking Alliance and the Ontario Trucking Association.
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