When President Donald Trump kept to his promise to withdraw the United States from the Trans-Pacific Trade agreement, many wondered what the future would hold for the US and FTAs. He also spoke candidly while on the campaign trail about the US’s participation in NAFTA, which Mr. Trump called “one of the worst trade deals in history.” With NAFTA at the forefront of headlines again, many are wondering what the future of NAFTA will look like.
In a recent article from World Maritime News, Emma Griffith, Fitch Ratings Director, said that such a decision “is likely to lead to changes to import and export volumes along with the trade routes, though such impacts are not likely to materialize until next year at the earliest.”
No matter if they’re importing or exporting, FTAs are important tools that help US shippers maintain competitiveness in today’s marketplace by reducing trade barriers.
During BDP’s Supply Chain Summit in Houston, TX, at the end of 2017, we polled the audience members - all shippers - for their perspectives on the US’s current outlook with FTAs. The results revealed an overwhelming majority (83%) believed that the US needed to be aggressive in their approach to new FTAs. This view was backed up by their opinions of NAFTA: (90%) believed that the agreement was outdated. But opinions were more divided over benefits of Free Trade Agreements. 46% believed that they kept US manufacturing costs down, although over a third thought that this wasn’t the case. Two thirds of those surveyed also thought that the Government should do a better job of enforcement outside of the US (reported from Transport Intelligence).
With the growing pace of global trade in today’s world, FTAs are one of the important strategic elements that boost old and new emerging economies. Now is an excellent opportunity for discussion and information sharing about FTAs for the US. The future of new and updated FTAs for the US markets are at the forefront for many businesses - getting the agreement in place, with a balanced objective is the most important aspect that needs to happen.
No matter the outcome of NAFTA, FTAs will be a major point of discussion at next week’s Regulatory Compliance Seminar in Houston, TX. Our team looks forward to sharing potential impacts and changes to the landscape. Stay tuned for more polling results from this year’s event.