Truckers fret over NAFTA redo plan

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - DAL­TON LAFERNEY

Pres­i­dent Don­ald Trump’s White House this week re­leased a first glimpse at its plans to “rene­go­ti­ate” the North Amer­i­can Free Trade Agree­ment, but it did vir­tu­ally noth­ing to as­suage stress in the lo­gis­tics in­dus­try that won­ders how sup­ply chains will be al­tered.

Since 1994, when NAFTA took ef­fect, the trade im­bal­ance with Mex­ico and Canada has reached into the tens of bil­lions of dol­lars. On the cam­paign trail, the pres­i­dent cited the is­sue as a rea­son to leave NAFTA al­to­gether, call­ing it “the worst trade deal signed maybe any­where.”

In the White House’s pol­icy an­nounce­ment Mon­day, the ad­min­is­tra­tion sig­naled a lighter touch to the trade agree­ment, a re­lief to in­vestors but not so much for lo­gis­tics pro­fes­sion­als — many of them have jobs be­cause of free trade across the bor­ders.

The Mex­i­can econ­omy is heav­ily de­pen­dent on ex­ports, and in­vestors in­di­cate that faith is be­ing re­stored in the Mex­i­can econ­omy af­ter the un­cer­tainty of the Novem­ber U.S. elec­tion. The peso has made a re­bound and is at its high­est value com­pared with the U.S. dol­lar since May 2016, ac­cord­ing to the Wall Street Jour­nal

Mar­ket Data Group.

Shan­non New­ton, pres­i­dent of the Arkansas Trucking As­so­ci­a­tion, said the or­ga­ni­za­tion has no par­tic­u­lar stance on NAFTA talks, but she said peo­ple through­out the in­dus­try are con­cerned with the Trump ad­min­is­tra­tion’s busi­nesslike de­ci­sion­mak­ing. She said any swift, ex­ec­u­tive changes could rip­ple through sup­ply chains be­fore any­body has time to adapt.

“The in­dus­try has anxi-

ety over change, and it’s not nec­es­sar­ily that the way we are do­ing it is the best way,” New­ton said. “It’s that the way freight cur­rently flows is de­pen­dent upon the method­olo­gies that are cur­rently in play.”

Al­ter­ing a trade agree­ment car­ries the po­ten­tial of fun­da­men­tally up­root­ing the way ship­pers op­er­ate. And with tech­no­log­i­cal in­no­va­tion and rapidly mov­ing con­sumer de­mands, these rene­go­ti­a­tions could have vast im­pli­ca­tions on ship­ping.

USA Truck does not want to see NAFTA rad­i­cally al­tered so much that Mex­ico loses its sig­nif­i­cance in the global and U.S. econ­omy. Jim Craig, the com­pany’s chief com­mer­cial of­fi­cer and pres­i­dent of its USA Truck Lo­gis­tics, said the com­pany is con­fi­dent that Congress will rec­og­nize the im­por­tance of the Mex­i­can econ­omy.

“Dam­ag­ing that re­la­tion­ship would be very harm­ful to the gen­eral econ­omy,” he said.

One of the long-held crit­i­cisms of the trade deal has been la­bor and wage dis­crep­an­cies be­tween the NAFTA coun­tries, par­tic­u­larly in Mex­ico, where la­bor is cheaper than in the U.S.

“The so­lu­tion to that [im­bal­ance] is to see Mex­i­can wages in­crease over time,

and that is a prod­uct of a robust econ­omy, strong de­mand for Mex­i­can prod­ucts for in­creased de­mand for la­bor, thus cre­at­ing wage in­fla­tion there,” Craig said. “While a stronger econ­omy sup­ports bet­ter wages and more ca­pac­ity to buy goods … elim­i­nat­ing that im­bal­ance en­tirely is sim­ply not an eco­nomic re­al­ity in any for­ward-look­ing plan.”

The NAFTA blue­print calls for an Amer­ica-first per­spec­tive, but it also calls for more au­toma­tion of ex­port, im­ports and tran­sit pro­cesses. And as New­ton points out, even with cross-bor­der ship­ments, there are Amer­i­can work­ers who have jobs be­cause of in­ter­na­tional trade as work­ers pick up and move freight from the bor­der into the coun­try.

The U.S. has more strict la­bor poli­cies than its NAFTA neigh­bors, and the White House calls for in­creased scru­tiny of NAFTA coun­tries’ la­bor poli­cies.

Some in the in­dus­try sup­port more reg­u­la­tion, be­cause ide­ally it would im­pose onto NAFTA coun­tries — par­tic­u­larly Mex­ico — higher la­bor

stan­dards, mak­ing it a more level play­ing field for U.S. de­liv­ery com­pa­nies.

“They don’t pay their peo­ple what we pay here,” Team­sters rep­re­sen­ta­tive Stacy Fox of Fort Smith said. “They need to be reg­u­lated the same as our drivers.”

Fox said Mex­i­can health re­quire­ments for com­pa­nies are too loose and al­low more un­qual­i­fied peo­ple to get be­hind the wheel. The Trump ad­min­is­tra­tion seems ea­ger to ad­dress this is­sue as well.

On Page 14 of the out­line, the gov­ern­ment would “re­quire NAFTA coun­tries to have laws gov­ern­ing ac­cept­able con­di­tions of work with re­spect to min­i­mum wages, hours of work, and oc­cu­pa­tional safety and health.” The gov­ern­ment has not ar­tic­u­lated those re­quire­ments.

The Trump ad­min­is­tra­tion said Wednes­day that of­fi­cial NAFTA dis­cus­sions will be­gin Aug. 16 in Wash­ing­ton.

“As an in­dus­try,” New­ton said, “we are go­ing to meet the need, what­ever it may be.”

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