Soapbox

Messing with NAFTA endangers California exports

John Beghin of the Long Beach Container Terminal at the Port of Long Beach watches a container ship being unloaded from a nearby crane.
John Beghin of the Long Beach Container Terminal at the Port of Long Beach watches a container ship being unloaded from a nearby crane. Los Angeles Times/TNS

Leaders from Canada, Mexico and the United States have held countless meetings in their quest to update the North American Free Trade Agreement. Negotiators continue to seek agreement on the contours of a deal.

Edward R Hamberger.jpg
Edward R. Hamberger

Privately owned freight railroads, including BNSF Railway and Union Pacific, that move massive sums of California goods to and from our neighbors, hope such aspirations will soon become reality. NAFTA has been remarkably successful, especially in California, and should be maintained.

We come to this conclusion less out of self-interest and far more due to the trends and needs among our diverse customers. Grain, corn and rice farmers produce far more because they can export to Canada and Mexico. Automobiles bought in California are part of a sophisticated supply chain that can involve as many as eight border crossings, the vast majority by rail. And paper and forest imports from Canada help support packaging for the bustling e-commerce industry.

Opinion

Manufacturing output is up nearly 80 percent since the deal took effect in 1994. The agriculture sector today exports a third of all its goods to Canada and Mexico, totaling nearly $43 billion in 2016.

That same year, 13 automakers manufactured 12.2 million vehicles in the U.S. – 1 million more than in 1992 – and have opened 15 new plants with 50,000 jobs.

For the railroad industry, which has spent $26 billion annually in recent years on infrastructure to get these goods to market, the evidence is equally clear. More than 40 percent of rail traffic and a third of rail jobs (with average salary and benefits of roughly $120,000 a year) depend on international trade, with a sizable chunk due to NAFTA.

All told, NAFTA has boosted the U.S. economy by $127 billion annually, while trade between the three countries exceeds $1.3 trillion annually. An estimated 14 million U.S. jobs - 575,000 in California - depend on trade with Canada and Mexico.

This all occurs because of sophisticated, well-established supply chains that help deliver the lowest possible costs for businesses and consumers. Moving goods tariff-free across borders, as NAFTA facilitates, is at the core of these movements.

While agreements can always be improved – in this case by making sure regulations are equal across the three nations – and must put domestic workers first, lawmakers should avoid policies that hinder U.S. participation in the global economy. Future economic prosperity for California rests on continued access to the Canadian and Mexican markets, not less.

Edward R. Hamberger is president and CEO of the Association of American Railroads. He can be contacted at ehamberger@aar.org.

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