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Legal Corner

Many trucking companies in Canada do business with our neighbours to the south and are engaged in cross border trucking. For those companies, the prospect of Canada renegotiating the North American Free Trade Agreement (NAFTA) with an American government in full protectionism mode may raise concerns about how any renegotiated NAFTA will affect business. Even carriers who never do business in the US may sit up and take notice of US proposals to change NAFTA.

The US Bureau of Transportation Statistics reported in June 2017 that trucks carried 57.6% of the value of the freight flowing to Canada from the US and from Canada to the US. The same report confirmed that the movement of freight as a result of NAFTA alone totals $91.1 billion per year and that the volume of freight being moved as a result of NAFTA has risen in the last six consecutive monthly periods for which data has been compiled. In other words, freight moved between the two countries as a result of NAFTA is big business, which may be impacted if new rules are imposed that raise trade barriers consistent with the protectionist rhetoric coming out of Washington, DC.

On July 17, 2017, the US Trade Representative’s Office released a summary of proposals setting out the US position going into the NAFTA talks set to begin in August 2017. These proposals, overall, do not set the ground work for massive change to NAFTA; therefore, concerns that NAFTA might be ripped up and terminated are probably overblown. However, there are some very interesting proposals that touch directly on the business of commercial carriers.

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