As leading advocates for our respective countries’ automotive manufacturing industries, we recognize the unique relationship that exists between the Canadian and U.S. economies, especially as it relates to manufacturing and trade. Our two economies don’t simply trade goods with each other, we design and build things together for sale in the global marketplace and, in that process, support millions of jobs.
One of the economic challenges our economies and industries face is an overdue need to make improvements to our shared border. The importance of a harmonized system of border operations is apparent due to the costs of cross-border movement of auto manufacturing production parts.
With bilateral automotive trade of $100-billion last year (one-fifth of total trade), automotive products represent the largest single portion of Canada-U.S. trade. This is due in large part to the close integration of automotive manufacturing along the border that started in the 1960s. Parts from a car manufactured in the U.S. or Canada will often cross the border several times before the finished product is sold to a consumer in either market. Inefficiencies at the border can add several hundred dollars per vehicle to the cost of assembly, which adversely affects auto manufacturers based in the U.S. and Canada and their ability to compete in the global marketplace.
Our nations’ leadership has recognized this. We commend the joint announcement made last year by Barack Obama and Stephen Harper on their plan for enhanced manufacturing trade between the two countries. The shared objective is “to enhance our security and accelerate the legitimate flow of people, goods, and services between our two countries. We intend to do so in partnership, and in ways that support economic competitiveness, job creation, and prosperity.”
As leading members of Businesses for a Better Border, a coalition of companies that are trusted traders with significant manufacturing operations, including integrated supply chains, in the U.S. and Canada, we support improving economic competitiveness, commercial efficiency and security across our shared border. In a private-sector reflection on the government’s binational co-operation, our two industries joined together to recommend several solutions.
We were pleased to see our recommendations reflected in the more recently released joint government work plans, and look to the full and rapid implementation of those work plans, so the commercial, economic and job-creating benefits can be enjoyed as soon as possible. In addition, we urge our respective governments to proceed with a new international crossing at the Detroit-Windsor gateway, our countries’ busiest commercial border crossing, as an essential strategic component to enhanced trade, commerce and job creation.
Boosting commercial trade across the border is vital to the growth of each of our economies, so it’s important that government and business leaders from both the U.S. and Canada continue to work to design cross-border collaborations that ensure efficient regulations and secure border operations.
Much of the same can be said about the unique relationship that exists between Mexico and the rest of North America as it relates to automotive manufacturing integration, the scale of auto trade, and the need to improve the efficiency of the movement of goods. The progress made in improving the movement of goods between Canada and the U.S. can be used as a model for improving efficiency of trade with Mexico.
We applaud Mr. Obama and Mr. Harper for working together to modernize border operations and encourage them to keep their commitment to the announced goals and work plans. Their continued commitment has the potential to create a harmonious working relationship at our border that would result in more prosperous and competitive economies on each side of the border.
Matt Blunt, the former governor of Missouri, is president of the American Automotive Policy Council. Mark Nantais is president of the Canadian Vehicle Manufacturers’ Association.
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