North American competitiveness hinges on free trade

Three decades ago, visionary leaders from the United States, Canada and Mexico began laying the groundwork for supply chain networks based in North America. Now, more than ever, we must continue building on that foundation to create a resilient economy that generates greater prosperity and opportunity for more people.

Following the implementation of the North American Free Trade Agreement, or NAFTA, in 1994, trade among the three countries skyrocketed. Just over a decade later, in 2006, trade between NAFTA partners had almost tripled, from $304 billion to $903 billion. The North American Free Trade Agreement allowed businesses and workers in the United States, Mexico and Canada to be more globally competitive.

Despite the successful example of North American-based supply chains offered by the automotive and other industries, it wasn’t until 2020 and the onset of the COVID pandemic that business and political leaders in all three nations realized the full potential, desirability and necessity of nearshoring and on-shoring. The pandemic exposed the economic and national security dangers of our dependence on far-flung supply chain networks.

The pandemic’s onset also coincided with the implementation of NAFTA’S successor, the United States-mexico-canada Agreement, or USMCA, with enhancements to agricultural market access, intellectual property, digital trade, financial services, labor and other areas.

The work to improve North American economic competitiveness continues. Private sector leaders representing the United States Chamber of Commerce, Mexico’s Consejo Coordinador Empresarial and the Business Council of Canada meet regularly to identify policy priorities and share best practices for North American global competitiveness.

At the North American Leaders Summit in Mexico City in January, representatives of the three business groups highlighted three policy areas to prioritize. First, they called on elected leaders to continue to align policies that safeguard our shared supply chains and strengthen our preparedness for future disruptions and crises.

Second, they highlighted addressing outstanding issues that have delayed the full implementation of USMCA. One sticking point is the Mexican government’s plan to ban genetically modified corn imports for human consumption. In a letter to President Andrés Manuel López Obrador, President Joe Biden and Prime Minister Justin Trudeau, the business leaders wrote: “Compliance with our science-based North American trade commitments will enable us to meet the food needs of our populations and the world, improve our environment and advance the prosperity of the people working in our agriculture-related industries.”

Third, the business leaders asked the three governments to preserve a policy environment conducive to business, investment and economic growth to ensure business certainty and reflect best practices.

With a collective market of more than 500 million people and more than $1 trillion in trade, the USMCA partners now account for almost onethird of global economic activity. We must continue to build on this success to enhance North American economic competitiveness, expand prosperity for the residents of our countries and strengthen our supply chains that meet our economic and national security interests.