North American Free Trade Agreement and Transportation: A Canadian Scorecard

A Canadian perspective is presented on the successes and failures of the North American Free Trade Agreement (NAFTA) as related to the transportation sector. For the agreement, 2001 is a watershed year when most of the agreement provisions should be in place. Canada’s intentions at the negotiating table and its stake in trilateral trade are discussed. Changes promised by NAFTA in the transportation business environment are examined. The impacts of NAFTA on nontariff barriers are detailed, including operating and safety standards, access to cargo ("cabotage"), ownership regulations, and investment screening. This analysis is a sequel to a presentation made at the 1994 TRB Annual Meeting and subsequently published in Transport Reviews. That paper concluded that NAFTA offered greater opportunity to American transport firms with the financial and managerial strength to exploit the agreement’s potential, and received mixed reviews in Canada. Seven years have passed since NAFTA implementation; this analysis looks at the promise that was NAFTA and produces a scorecard from a Canadian point of view. The grade is not good.