Leigh Miller for GlobalAtlanta
Atlanta-based United Parcel Service Inc. has joined a task force of major U.S. companies to develop a set of 40 recommendations for North American governments on how to make the Nafta free trade agreement more effective by reducing barriers to trade and commerce.

UPS’ vice president of strategic development and public affairs for Latin America, Caribbean and Canada, Amgad Shehata, who is part of the task force, told GlobalAtlanta at a seminar on Oct. 6 at Emory University’s Goizueta Business School that the group expects to release its results in early 2007.

The Goizueta seminar addressed the future of the Nafta agreement for encouraging greater trade and the flow of labor across borders between the United States, Mexico and Canada.

The three countries must accelerate their process of integration in order to achieve greater efficiency, security and competitiveness vis-a-vis economies in Asia and Europe, said David Abney, president of UPS International, who was one of the speakers at the seminar.

Other panelists were Andres Rozental, president of the Mexican Council on Foreign Relations; Gordon Giffin, former U.S. ambassador to Canada, and William Dymond, executive director of the Centre for Trade Policy and Law at Carleton University in Canada. Each was instrumental in the negotiations leading up to Nafta’s passage in 1994.

“From a company point of view, we don’t decide where walls go, but we can actively work with governments to address security issues while also removing barriers to trade for goods, funds and people,” Mr. Abney told GlobalAtlanta in response to a question about the flow of products and immigrants across international borders in North America.

He added that improving the physical infrastructure, such as highways and railroads in Mexico, would facilitate the flow of trade among all three Nafta countries. He also suggested forming an integrated customs agency technology platform and automating customs paperwork to speed up trade.

UPS already has a pilot program in Guadalajara and Monterrey, Mexico, that is testing a pre-clearance customs process for transportation carriers moving products between Mexico and the U.S., Mr. Abney said.

Balancing security and the speedy flow of commerce are constant challenges for the Nafta partnership, Mr. Abney noted. “If borders shut down, it would shut down commerce among our countries,” he said.

“Geographic proximity works as long as there are no delays. If there is a one-day delay at the Mexico border, China is just as close in terms of delivering products,” Mr. Abney added.

While UPS and other Atlanta companies continue to expand their business in China, Canada and Mexico remain the U.S.’ top trading partners, he said. In 2006, U.S. trade with Nafta countries is estimated to be 30 percent of total U.S. trade, while trade with China was only 11 percent, he said.

Imports from Canada and Mexico are expected to equal 27 percent of the U.S.’ total imports this year, while imports from China are to account for 14 percent.

“Our mutual success is integrated more than ever before,” Mr. Abney said of the U.S., Canada and Mexico.

Mr. Rozental agreed, asserting that labor flows among the three countries are also important to Nafta’s future success. “For goods to flow, people have to flow,” he said. “The greatest advantage North America has is our people.”

He added that U.S. companies drive the immigration phenomenon because they need employees. He noted that although it is illegal for American companies to hire undocumented workers, more than 400,000 are hired each year from Mexico alone.

Mr. Giffin agreed that U.S. companies and government policies play a disproportionately large role in the Nafta relationship. “The economic value of Nafta to all three countries is enormous, but the challenge is substantially resident in the U.S.,” he said.

Americans have the responsibility, he said, of learning about the interconnections among all three countries and accepting that the U.S. is dependent on its neighbors. Canada and Mexico must accept that they cannot maintain sovereignty and still benefit from an integrated North America, he added.

Mr. Giffin, who is a senior law partner at McKenna Long & Aldridge LLP, encouraged businesspersons to refer to a document created in May 2005 called “Building a North American Community” that gave specific recommendations to North American government leaders on improving and expanding the Nafta relationship by 2010.

The report was written by 31 members of the Independent Task Force on North America, including Mr. Giffin and Mr. Rozental, for the Council on Foreign Relations in association with the Canadian Council of Chief Executives and the Mexican Council on Foreign Relations. It suggested a plan to increase the security and well-being of citizens in light of terrorist and criminal security threats, increased economic competition from abroad and uneven economic development. To see the report, visit www.cfr.org/publication/8102/building_a_north_american_community.html.

Contact Jeff Rosensweig, director of the Global Perspectives Program and associate professor of international business and finance at the Goizueta Business School, at (404) 727-6360 for more information.