Over the past few months as negotiators from the U.S., Canada and Mexico have been feverishly discussing the future of the North American Free Trade Agreement (NAFTA), I have been conducting business as usual speaking to and meeting with our many customers in the U.S. And my expectation is that whatever the outcome of the NAFTA negotiations, I will continue to meet the needs of our American distributors and manufacturers. You may think I’m naïve, but I believe I’m just being a realist and that over a century of friendship won’t be erased in the course of 6 months.
The truth is that the U.S. and Canada are likely the world’s strongest trading partners. In fact, Canada is America’s largest trading partner next to China. Notably, the U.S. and Canada are relatively equal trading partners. The U.S. overall trade deficit with Canada is only 2% or $11 billion. To put that in perspective, the U.S. trade deficit with China is a whopping 60%. Here’s another statistic to add some context to the depth of the trading relationship. The trade across the Ambassador Bridge, between Windsor, Ontario and Detroit, Michigan, alone is equal to all trade between the United States and Japan. In addition, the strength of the Canada-U.S. trading relationship is far from a new phenomenon. It has been in place for decades. While the trading relationship has been marked by all kinds of tariff and duty disputes, it has withstood the test of time.
Perhaps even more important than the financial benefits, the U.S.-Canada relationship is based on shared values. We take some of those for granted but our common respect for individual rights and a belief in democratic government create a powerful bond. Both countries foster and thrive on the competitive marketplace. In addition, there is a shared emphasis on worker health and safety as well as a growing awareness of the ecological impact of industry in both countries. I know that when I visit customers and colleagues in the U.S., these common beliefs pave the way to our business discussions.
The Canadian and American manufacturing sectors have a particularly strong connection forged in large part on the automotive industry. These days, manufacturers in both countries share a common interest in bring business back to North America. In fact, the reshoring movement is gaining traction as customers tire of long lead times and the uncertainty associated with overseas shipments. Greater emphasis on supplier agility means that inventories change over faster and customers are looking for the project focused shorter runs that can best be accommodated by manufacturers in Canada and the U.S.
Also, the physical closeness of the two counties can’t be discounted. That proximity creates opportunity with most goods being moved in a matter of days – and sometimes hours.
So for all of these reasons I remain optimistic. I can’t predict what the outcome of the NAFTA negotiations will be or whether NAFTA will even survive. However I am certain that, based on the strength of our time-tested relationship, our shared political and economic values and our common interest in the revival of the North American manufacturing sector, we will continue to do business and create opportunity with our customers, colleagues and suppliers in the U.S.