Christopher Sands, a member of MLI’s Research Advisory Board, wrote a timely analysis of the challenges surrounding transportation infrastructure between Canada, the United States, and Mexico. Here is an excerpt:
North America’s trade infrastructure is not keeping pace with continental trade, and as a result, the United States and its neighbors are at a growing competitive disadvantage to rival economies in Asia and Europe.
At the 2010 annual meeting of the North American Super Corridor Coalition in Des Moines, Iowa this week, I had the chance to meet with business and community leaders who have coalesced around the need for better linkages between central Mexico and Manitoba running through the heartland of the United States like a parallel Mississippi River made of concrete and steel. They are concerned that economic opportunities that could help boost the NAFTA partners out of recession are being lost through a failure of vision and leadership in all three countries.
Some 70 percent of North American trade – that is, trade between Canada, Mexico and the United States – is transported by land, principally by truck and rail, from bulk commodities to retail goods to automobiles. This figure does not account for the additional value of energy trade moved by pipelines and powerlines across our borders.
It is not a surprise that Canadians and Mexicans are concerned about North American transportation infrastructure. For each country, the United States is their largest export market, accounting for roughly three-quarters of their exports. And while governments in Canada and Mexico have invested billions in recent years to improve infrastructure connecting to the United States, by virtue of its central location, Canadians and Mexicans must rely on U.S. investments in infrastructure to complete the connection.
That does not suggest that U.S. investments in infrastructure, both public and private and sometimes both, are for the benefit of Canadians and Mexicans. In fact, Canada and Mexico are the largest export markets for U.S. companies as well, and Canadians and Mexicans like U.S. products and brands. China has been growing rapidly as a U.S. trading partner, but the relationship flows mainly in one direction: U.S. consumers buy Chinese products, but Chinese consumers do not buy much from the United States.
In his 2010 State of the Union Address President Obama set an ambitious goal: to double U.S. exports over 5 years and to create 2 million new U.S. jobs in the process. Where better to start than with the countries that have a high propensity to buy American?