The future of North American trade

If Trump wins the 2024 election we have an opportunity for a trade realignment.

It’s now clear to many that global free trade continues to be a huge mistake for the western nations and most of its citizens, with significant wealth transfer from the west to the rest.

And its now clear that if Trump wins the 2024 election we can enjoy a huge opportunity for a trade realignment that will significantly localize trade within the USMCA trade region.

This will require the renegotiation of the USMCA agreement, but if undertaken correctly it will rapidly improve prosperity for all the citizens within the USMCA.

All three countries USA, Canada, and Mexico have something to offer to move the whole trade bloc toward a new level of prosperity….. but as said…it must be done right.

The USMCA trade bloc members collectively have many strengths to enable such a trade bloc to flourish, but they do have some weaknesses that must also be corrected.

Once a USMCA trade bloc plan is fully undertaken these nations will be able to operate with far less dependence on the global free trade environment. This will reduce the significant risk of wealth transfer and future geo-political instabilities.

The strengths.

The USA has the economic size and residual wealth to drive such changes forward.

Collectively the three nations will represent 30% of world GDP. The USMCA will contain the youngest consumers and youngest workforce when compared with other nations such as Japan, China and even Europe.

The whole continental USA including Mexico and Canada will have all the resources needed including ample fresh water to support future industrial activity.

Although some resources will need further development in terms of mining, and certainly refining, they exist in ample quantity in the ground, and once developed, will avoid any future need for imports and reliance on foreign actors.

Both fossil fuels and nuclear material resources are plentiful across the 3 trade jurisdictions.

The broad range of climates east-west & north-south will allow a full spectrum of farming and fishing output without the need for many imports. Some raw farm produce may require further investment and development, but the trade off with local production rather than importation is a profound advantage.

The USMCA trade bloc already has the technological knowhow to develop all the products and services to support such a fully self-sufficient economy.

The educational systems are in principle very capable of sustaining the future skill sets needed without any significant immigration.

Capital investment can be generated and deployed from within the three trade bloc economies without any need for external foreign investment.

So, a high percentage of trade can be conducted inside the trade bloc that will avoid the wasteful long supply chains that has built wasteful supply chains and inventory and have assisted in driving the need for low interest rates.

Canada can provide many types of resources and energy products, and Mexico can provide a low-cost workforce where that provides an advantage.

Canada will soon have a conservative government very aligned with the ideology of the republican president and so that will become a symbiotic alignment.

Mexico has a new and prosperity focused government that appears to be prepared to work with anyone that can assist with that journey

The weaknesses

Some weaknesses must be addressed as prerequisites for a self-sustaining localized trade bloc.

All three nations need to address the border controls that currently can allow unplanned migration. They will also need to reduce planned Immigration to better focus on the development and well being of their citizen workforce. However, the borders must be planned so they are not a hindrance for legal trade between trade bloc partners.

A common direction away from the distraction of climate mitigation must ensue. This will be far more possible with a republican president in the USA, and a conservative prime minister in Canada. Focused adaption to a slowly changing climate will be a far more equitable direction.

The Educational systems in all 3 nations must become far more focused on building a workforce that can support the industrialization of the economies. So, it will mean a firm prioritization away from liberal studies, and a strong move toward STEM programs for both school leavers and the education and training of the existing workforce.

The public sectors have become bloated and will need to be both reprioritized and Leaned-out with productivity programs. The excess workforce must be redeployed back to the private sector that will require far more capacity to support economies that will be making, growing and mining far more of what is being consumed.

Reshoring plans will require strong trade policies to ensure imports are reduced and exports have far more value added to benefit the trade bloc citizens.

All 3 will need to agree a far more rigid trade policy set that ensures that trade remains inside the trade bloc and that imports in any form from outside the trade bloc are discouraged with agreed penalties.

Capital controls may need to include controls on any foreign investment to avoid back door import value and dilution of local ownership.

Infrastructure will need to be rebuilt to support the reindustrialization process and the increase in localized supply chains. This will mean the reduction in import traffic at seaports and the increase in internal north south transportation etc.

Inter state/provincial trade controls need to be reduced so that as much as practical more free trade approach exists within the USMCA trade bloc.

Improved defence spending will focus on more localized defense with far less global investment needed.

Mexico will be challenged to smash the drug cartels and human trafficking issues.

Trade Negotiations

Its clear that many issues will need to be addressed such that the final agreement is a win-win for all trade bloc participants.

National industry sector trade protectionist controls will need to be reviewed and become better aligned as part of the USMCA negotiations.

The concepts of maximizing citizen prosperity while increasing competitiveness and productivity must be balanced correctly.

It will take both trust and maturity at government levels across all 3 participants, but the journey will be worth it, and many now believe that due to geopolitics any alternatives are limited.

About the Book

This book is about how in less than one lifetime we have experienced the destruction of the manufacturing sectors in our western societies. and the significant loss of national prosperity, and why the imperative for western economies must be to ….Take Back Manufacturing!

The globalized manufacturing approach with efficient supply chains supported by liberalized free trade agreements has been the business norm in the last four decades and has been the prime reason for the “hollowing out” of our Western industrial base.

But now many experts predict yet another significant change regarding global and national economic conditions that will, for many reasons, provide an opportunity for our western economies to move back to more localized trade blocs, and the reshoring of their manufacturing.

This book provides a perspective and outlook that suggests that with the correct political will and focus they could recover their manufacturing industries and improve future prosperity.

Nigel Southway is based in Toronto Canada and is an independent business consultant and the author of Take Back Manufacturing: An Imperative for Western Economies, and Cycle Time Management: The Fast Track to Time-Based Productivity Improvement, an early LEAN thinking textbook.

He consults and educates worldwide on Business Productivity Improvement, LEAN business practices, Advanced Manufacturing Engineering, Future Supply Chain Management, Industry 4.0, National Sustainability, Global technology transfer projects and joint ventures and more.

He is a past chair of the Society of Manufacturing Engineers and the leading advocate and spokesperson for the Take Back Manufacturing Forum, and the North American Reshoring initiative in Canada.

 www.nigelsouthwayauthor.com