Earlier this month, the United States met with leaders of Canada and Mexico to discuss the North American Free Trade Agreement (NAFTA). But even after decades of adhering to NAFTA, the trucking industry wasn’t sure what the results would be.
A Brief History of NAFTA
Most career truckers remember the first NAFTA proposals and the uproar it caused in the shipping industry. There were fears that trucking would be overextending itself, and that the trade-off would artificially impose higher prices from producers all the way down to the consumer. Ultimately, NAFTA proved that everything from textiles to the humble avocado could be imported and trades between the major North American countries easily and affordably. In the mid-1990s, the world was starting to shift, and the Gross Capital Product (GCP) was being replaced by the Gross Domestic Product (GDP). International businesses were moving facilities to North America because resources were better and less expensive. The shift ultimately created jobs throughout the continent and reduced costs to consumers. Leading the way for e-commerce, NAFTA forced the trucking industry to look at the implications of a new global economy.
While the current proposal for NAFTA still needs to be voted upon by Congress in November, it rings as a continued success for the agreement. Now branded as the United States-Mexico-Canada Agreement (USMCA), people are still referring to is as NAFTA. The latest updates to the agreement will provide a higher standard of trade, resulting in even freer markets, as well as job and business growth. More and better-paying jobs, as well as a maintained or reduced cost on the consumer level, make the newest arrangement an even better version of the original.
What This Means for the Trucking Industry
Perhaps the biggest hurdle to overcome is how tariffs play into the latest version of NAFTA. Tariffs on automobiles, textiles, and agriculture were phased out within a few years of the original agreement. The latest bout of tariffs might cause some turbulence which will no doubt trickle down to the trucking industry and may force some fleets to raise their prices. On the other side of the coin, the more open trade and employment may allow trucking companies to secure more career drivers looking to earn competitive salaries.
We are still in the early stages of the agreement, and won’t see an official vote until November, but this is an issue which could potentially give another needed boost tot he trucking industry.