Trump's trade policy puts transport industry at risk

Published on Monday,13 March 2017

US President Trump's withdrawal from the Trans-Pacific Partnership (TPP) and his proposal to levy high import taxes on trading partners, including Mexico, could put at risk many transportation positions at ocean carriers, forwarders, airlines, customs brokers, trucking companies and railroads, according to executive director of the US Airforwarders Association, Brandon Fried.
Mr Fried wrote in a report published by New York's Air Cargo World: "Unfortunately, each fails to consider the realities of today's trading challenges, while placing our country in the path of unintended consequences, including a stagnating American economy, limited buying options, lower-quality products and higher unemployment.
"Our economy will be much stronger if the American people can trade across their borders. Trade increases competition, which forces us to respond with higher-quality products and lower prices. Trump's 'America First' initiative may be a good election soundbite, but it only limits our buying options while forcing us to accept inferior products."
Mr Fried continued: "President Trump's call for fair trade is an essential component of any trade policy. Trade agreements only reach their full potential when they adequately address critical issues, including intellectual property rights enforcement, anti-dumping laws and regulatory complexity.
"China must understand that currency manipulation, theft of intellectual property and substandard working conditions are unsustainable, and will only serve to alienate its foreign trading partners in the long run.
"But there is still more to it than that. Trump blames existing trade agreements, including the North American Free Trade Agreement (NAFTA), for the US trade deficit. However, we must understand that this gap is not taking money out of our pockets; in fact, because of the agreement, American consumers have benefitted by getting more products for their dollar.
"When the NAFTA deal started in 1993, the US exported only US$42 billion worth of goods to Mexico. In 2015, the US exported $267 billion worth south of the border. Many argue that it is automation, not cheaper wages that is the chief reason that relatively few American jobs were lost to Mexico.
"Many products sold in the United States have components that began in the US, travelled to Mexico, were combined with another product, and then shipped back to the US for final assembly-- sometimes with parts made in Canada.
"It's often hard to say whether they are Mexican, Canadian or US products. The NAFTA agreement may need modernising to address working and environmental conditions in Mexico, but should continue without interruption," he wrote.
"If American manufacturers are forced to return their end-to-end process to the US, an uneducated workforce, ill-equipped to respond to competitive challenges, will only force them to roboticise factories. At Amazon, for instance, technology has reduced the time a human is involved in processing an order to less than 60 seconds."

Sources: http://www.transportweekly.com/pages/en/news/articles/131829/