NAFTA drives trade, and also infrastructure
Clinton Burns and Robert McDonnell founded Burns & McDonnell in 1898 to provide the residents of Kansas City and the surrounding region with dependable sanitation, water and electricity. Although the scope of Burns & McDonnell has expanded tremendously since those early days, nearly 120 years later the company has remained consistent with its founders’ vision of advancement through improving infrastructure.
President Donald Trump has made it clear that he supports building new and more efficient infrastructure to transport American goods around the country and across our borders. Commerce drives the United States’ need for better infrastructure, and in turn improved infrastructure drives American commerce. This has never been more apparent than U.S. trade with Mexico and Canada.
As a result of NAFTA, the North American Free Trade Agreement, Canada and Mexico are now the biggest export markets for U.S. businesses. The rapid expansion of North American trade has been a catalyst for advanced infrastructure development and, ultimately, U.S. job growth.
Trade among NAFTA partners has been a boon for U.S. consumers, businesses and is directly tied to U.S. job growth. For instance, since NAFTA was enacted, increased trade with Mexico and Canada has resulted in 5 million new U.S. jobs.
Today, nearly a quarter of U.S. manufacturing output is dependent on NAFTA, either as an end market for U.S. exports or as a tariff-free source for inputs that go into American products. Reliance on trade is important to U.S. businesses big and small. A recent study found that 125,000 American small businesses depend on NAFTA to export their products tariff-free to Mexico and Canada every year.
The importance of NAFTA to U.S. commerce goes deeper than just the removal of tariffs, though. The U.S.-Mexico border is one of the most dynamic in the world, with 43 points of entry that enable over $1 billion worth of goods to cross every day. But this growing trade has introduced complications. It has added congestion at points of entry, causing significant economic losses and further highlighting the need for improved and expanded infrastructure.
Longer wait times at borders mean billions of dollars in extra costs to U.S. companies — especially those that import and export perishable goods. For example, delays at just the San Ysidro border crossing in San Diego cost the U.S. economy $1.5 billion a year in lost economic output, according to a study by the city’s regional planning authority.
The infrastructure required to address this congestion is inherently complex. Such projects require economic certainty and cooperation by national security agencies on both sides of the border. NAFTA provides both the incentive for cooperation and the mechanisms to accomplish it.
By making U.S. ports and transportation systems more efficient and advanced, the flow of goods between NAFTA partners will increase. That ultimately benefits U.S. consumers and creates more jobs.
As negotiations unfold, NAFTA trade representatives must remember that jobs and economic prosperity are on the line. American companies overwhelmingly support the modernization of NAFTA — with an emphasis that negotiators must not disturb the existing commerce and benefits that NAFTA has already created.
Mike Brown is president of Burns & McDonnell International.
This story was originally published March 15, 2018 at 8:30 PM with the headline "NAFTA drives trade, and also infrastructure."