The fact that it’s now the North American Free Trade Agreement’s (NAFTA’s) 20th anniversary this year will probably draw a blank stare from most Canadians. However, for a select few it will mean a continuing round of meetings, conferences and cocktail parties, where the issue of trade between Canada, the U.S. and Mexico will be top-of-mind; with the major issue being, “Where do we go from here?” However, at the Cargo Logistics Canada Expo and Conference held in Vancouver, Canada, November 29–30, Luis Brasdefer, Trade & Investment Commissioner for the Mexican Government had little doubt that a revitalised NAFTA agreement will benefit both Canada and Mexico. Not that NAFTA, inked in 1994, has been a flop. In fact, since it was introduced and trade barriers slowly stripped away, trade between Canada, the U.S. and Mexico has roughly quadrupled and, according to the U.S. Chamber of Commerce, that additional trade has generated roughly five million jobs in the US. Without question, in spite of loud protests by various lobby groups 20 years ago (that are being heard again today), the existing NAFTA agreement has been beneficial for North American trade – as well as the Continent’s transportation industry including trucking, rail, airlines and marine shipping. In an interview with AJOT, Brasdefer said, “There’s a huge opportunity for Canada to diversify its exports, but not only to Mexico – I think Canada should see Mexico as a Gateway for Latin America. That’s a potential market of 580-million people. “It’s not about changing markets, it’s about diversifying. “Today the Mexican Government is spending a huge amount of money on infrastructure. The gate is open for Canadian companies; with all the technology, knowledge and expertise they have; to make logistics more efficient and more competitive. “I can think of three or four multiports and seaports that are being developed in Mexico that could be very attractive to Canadian companies.” Brasdefer said the advancements that have been made in constructing highways for truck cargo, including high and heavy loads, between Canada and Mexico and the routes Canadian railways, particularly Canadian National Railway, have developed between Canada and the Mexican border have created major trade corridors into Mexico and, from there, into South America. He also said that the labor shortages that exist in Western Canada, particularly in sectors such as long distance truck drivers, could be alleviated through collaborative efforts between Canada and Mexico. “I think we could duplicate programs that we already have in terms of a labor force coming to Canada to work temporarily,” he said. “We have a very important program called the Mexican-Canadian Seasonal Agricultural Worker Program. And, we’re receiving hundreds of workers who come from Mexico to work in fields in Canada. Today, we’re exploring the possibility of other areas of labor coming to Canada; for example construction workers.” Laura Dawson of Ottawa-based consulting group, Dawson Strategic, said in a recent statement: “The three governments are gathering input and developing recommendations for a North American Leaders’ Summit in February 2014. “In Canada, the Canadian Council of Chief Executives has taken the lead in rallying businesses in all three countries around the issue of deepened integration. A window of opportunity for important policy change is rare and actions involving multiple governments, interests and stakeholders are difficult. I am convinced that it is time for action and that it will be a long while before there is a similar convergence of opportunity and interest.” NAFTA & Competitive Advantage While North/South trade has increased dramatically on the North American continent as the tariff reduction contained in NAFTA were rolled out, the consensus in most quarters seem to be that the leaders of all three governments should think about giving trade negotiations a healthy prod in the rump. It’s not as though progress hasn’t been made. For example, under the Beyond the Border Action Plan, initiatives have been implemented such as: Under NEXUS, a program designed to expedite the border-clearance process for pre-approved travellers, has increased 50% in two years. In addition, the two governments have opened new NEXUS lanes at land-border crossings and now allow NEXUS-approved passengers to use priority-screening lanes at major airports.  A pilot project for U.S.-bound cargo arriving by ship at Prince Rupert, British Columbia, has reduced inspection times at the border to an average of 19-minutes compared to two hours for shipments not included in the pilot project. As part of another pre-clearance pilot project, some 3500 southbound trucks were able to cross the border at Surrey, British Columbia, with only a rolling stop on the U.S. side. As well, trade between Canada and Mexico has also fared well under NAFTA. For example, a study by Jared Carlberg & James Rudel at the University of Manitoba indicates that agricultural trade has benefited from reduced tariff and non-tariff barriers to trade between the two countries. The study concluded that trade between Canada and Mexico was somewhat different than trade with the U.S. “Canada imports a wide variety of fruits and vegetables from Mexico, but its top import is beer, followed by tomatoes, guavas and mangos, peppers, and avocados. Canada’s leading exports to Mexico are canola, wheat, beef cuts, skim milk powder and canary seed.  “It can be cautiously concluded that trade liberalization under NAFTA resulted in an increased two-way flow of goods between Canada and Mexico. Though the speed at which market access is being granted varies by commodity and to some extent by country, it is clear that NAFTA—perhaps on its own but certainly also as a part of Mexico’s trade liberalization strategy—has played an important role in increasing Canada-Mexico trade in agricultural products. Though the effects of trade liberalization have varied by sector, these effects have in general increased bilateral trade flows.”  The study also noted: “Unlike agricultural trade between Canada and the US that increasingly consists of roughly equal two-way flows of similar processed products, trade flows between Canada and Mexico are one-sided and can be explained by conventional arguments of comparative advantage. Mexico exports labor intensive goods such as horticultural products, and Canada exports land intensive products such as grains and oilseeds.” Trade Corridors It can be argued that the challenge of NAFTA’s next twenty years, is integrating regional North American and global supply chains. According to a report issued by the Calgary-based Van Horne Institute, “About a third of trade with the United States took place within the framework of the North American Free Trade Agreement (NAFTA), mainly through land gateways that are effectively ports of entry into the United States. More than anywhere else in the world, North America commerce is not just about trade, but about functionally integrated supply chain.”  Currently there are a number of corridors being developed including the Canamex Corridor and the Prairie-to-Port initiative (see AJOT Jan. 27 edition pages 4, 8 for stories). These land routes link Canada, the US and Mexico in a North-South corridor  - a corridor which flows through the main regions of trade between the respective nations.  There is still a great deal to be done both in terms of engineering and physical infrastructure as well as nation-to-nation negotiations. Issues such as truck hijackings and political instability in Mexico’s abutting provinces are a major concern. But the promise of NAFTA for the next two decades far outweighs the problems.