“Study of Studies” Examines the Successes and Shortcomings of NAFTA

By Patrick Burnson, Executive Editor
May 08, 2014 - SCMR Editorial

The Texas A&M Transportation Institute (TTI) released a meta-analysis of research on the North American Free Trade Agreement (NAFTA), revealing the state of knowledge about the landmark trade agreement’s impacts on trade, energy and the environment.

NAFTA 20 Years After affirms agreement among prior research studies that while the long-term outlook for North American competitiveness is promising, our future demands deeper integration of the three economies, better infrastructure and streamlined cross-border processes.

“Findings from the meta-analysis show that all three North American economies have benefited enormously from NAFTA over the past 20 years,” says Juan Carlos Villa, trade expert and Latin America Regional Manager at TTI. “Efficient border crossing processes, improved cross-border trucking, updated infrastructure with increased use of technology, and information exchange are some of the key elements that require continued work.”

Villa and TTI released NAFTA 20 Years After at the recent NAFTANEXT Summit in Chicago, Illinois.

The TTI research team reviewed numerous research reports published over the past ten years to identify points of consensus among researchers on the outcomes of NAFTA implementation and on recommendations for improvement. Chief among the successes are harmonization of climate change policies and efficient tri-lateral energy production supply chains. These developments have contributed to U.S.-Canada surface trade doubling and U.S.-Mexico trade quadrupling in the twenty years since the implementation of NAFTA. The study also provides an overview of broadly-agreed upon barriers holding back further economic success.

“NAFTA 20 Years After identifies expert agreement on unresolved issues stalling the advancement of economic integration that would make the entire North American trade bloc more competitive,” says Dr. Stephen Blank, Co-Chair of the North American Transportation Competitiveness Research Council. “Policy and process modernization is lagging behind the pace of growth.”

“Modernizing our land border-crossing processes and investing in much-needed infrastructure will ease congestion and tri-lateral commerce will benefit,” says Leslie Blakey, Executive Director of the Coalition for America’s Gateways and Trade Corridors. “This study underscores the necessity for a dedicated freight infrastructure fund in the United States. Our current haphazard approach to investment impedes the flow of commerce throughout the entire NAFTA bloc.”

Key points addressed in the meta-analysis include:

    Investment needs: Infrastructure development and process modernization have not kept pace with growth, creating bottlenecks and congestion, particularly at land ports of entry. A potential solution to this issue is the modernization of land border-crossing practices, using technology and adding key infrastructure.
  Harmonization of truck size and weight regulations: Truck size and weight regulations differ among NAFTA nations and within individual countries. Establishing standards will benefit all countries in facilitating cross-border traffic.
  Fully implementing NAFTA trucking provisions: The failure to fully implement NAFTA trucking provisions has led to unnecessary dryage operations at land ports of entry, which in turn generate additional empty trips and waste human resources. A holistic solution is needed to address this issue.
  A coherent combination of policies to mitigate high levels of greenhouse gas produced by truck and freight rail transportation: Cross-border freight movement is one of the highest GHG-emitting industries. A coordinated approach involving subsidies, regulation and emissions pricing and will help lower costs and reduce emissions.
  Preparation for changes in North American energy production and consumption trends: The three NAFTA countries need to synchronize their renewable energy standards, trade renewable electricity credits, improve cross-border transmission capacity and use NAFTA institutions for data collection.

About the Author

Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson


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