In 1989, the Canada-U.S. Free Trade Agreement (CUSFTA) removed trade barriers between the U.S and Canada. Only five years after CUSFTA was implemented, the U.S., Canada and Mexico signed the North American Free Trade Agreement (NAFTA) to increase trade and further support fair competition across North America.
The trucking industry has felt the direct effects of NAFTA as the controversial agreement has opened up trade and allowed free access across all borders. Opponents argue the agreement has led to higher insurance rates, increased unemployment and negative environmental changes. Proponents argue NAFTA has increased the U.S. GDP by 50% and created over 26 million new jobs and assisted in the growth of Canadian trucking – now a $54.7 billion industry.
Since NAFTA was signed, trade between Canada and the U.S. has continued to grow. Currently 61% of trade between the two countries is completed by trucks. Despite the struggling economy, Canada predicts NAFTA will continue to reduce trading costs and improve competition across the region.
Amidst an economic downturn and a newly elected President, where does the future of NAFTA stand? President-elect, Barack Obama has stated he supports free trade, but recognizes the flaws in the NAFTA agreement and wants to “open a dialogue” to improve the current terms. We are all eager to see what will happen.