Trade strengthening needed among NAFTA partners

Published on: Oct 3, 2013

In a joint letter to President Barack Obama, Canadian Prime Minister Stephen Harper, and Mexican President Enrique Pena Nieto, the main lobbying groups for large companies in the three countries said their members "continue to face obstacles to doing business across and within our borders."

The North American Free Trade Agreement was enacted nearly two decades ago in 1994. The letter signed by US Business Roundtable, the Canadian Council of Chief Executives, and the Consejo Mexicano de Hombres de Negocios, explained, "As free trade agreements proliferate, we must achieve a seamless North American market to be competitive. The challenge before us is to move beyond pilot projects, feasibility studies and regulatory reviews to fuller implementation and longer term strategic action."

Today, Canada, Mexico, and the United States form a marketplace that includes more than 460 million consumers and represents one quarter of the world’s economy. At $19 trillion, this marketplace is larger than that of the EU and more than double the size of China. 

An estimated 14 million U.S. jobs are tied directly to trade with Canada and Mexico. Half of U.S. exports and imports to and from Canada and Mexico take place between related companies. Moreover, Canadian, Mexican, and U.S. manufacturers and service companies have been increasingly investing in each other’s countries over the last two decades. 

The letter noted that the international trade and investment landscape has changed dramatically, becoming much more competitive and opening up many new opportunities.  "For these reasons, the time is ripe for Canada, Mexico, and the United States to respond to these new challenges and pursue new opportunities to enhance our global competitiveness," the letter stated.

The three countries are all participating in negotiations on a Trans-Pacific Partnership trade deal with nine other nations that could offer a vehicle for upgrading NAFTA, but the business groups argue that even more can be done trilaterally.

Three broad areas were identified where more can be done by the respective governments to create a more integrated and competitive North American economic space.  These areas are:  (1) intelligent border systems; (2) greater regulatory cooperation; and (3) North American energy security and sustainability.

The groups applauded the fact that governments have recognized that a lack of regulatory cooperation is "handicapping the international competitiveness of Canadian, Mexican, and U.S. companies and have launched initiatives to address this problem." The issuance in May 2012 of an Executive Order (E.O. 13609) by President Obama aimed at eliminating and rolling back unnecessary regulatory differences that increase costs for companies doing business across the border is a "welcome step toward minimizing regulatory complexity," the groups said, adding that the Canadian and Mexican governments should issue similar directives.