North American Truck Delivery (in hours)
New YorkChicagoSan FranciscoMexico CityHalifax to:2456144120Montreal to:1825120110Toronto to:1220108115Winnipeg to:72368470Calgary to:82465878Vancouver to:108703688
Rail
In preparation for expanded traffic throughout North America, rail networks are expanding on a continental scale. Strategic alliances between Canadian and U.S. railways speed the flow of goods to market, expedite border crossings, and provide quality intermodal services. Canadian rail carriers have co-ordinated Canada-Mexico freight services through agreements with the Mexican state railway and with U.S. railways and barge lines.
North American Rail Delivery (in hours)
New YorkChicagoSan FranciscoMexico CityHalifax to:9677180205Montreal to:4836144169Toronto to:4824130155Winnipeg to:7236120191Calgary to:1026696215Vancouver to:1209672250
Source: CN North America
Marine
Several of Canada’s deep-water ports are strategically located near large U.S. markets. Many of these facilities are open year-round. Marine travel is concentrated in the Great Lakes/St. Lawrence Seaway system and on the east and west coasts of North America. The St. Lawrence Seaway serves an area containing some 61 million people in much of the industrial heartland of North America.
Air
Flights from Canadian airports serve all major North American centres, allowing for overnight delivery by air cargo. Following the signing of the 1994 “Open Skies” agreement, Canadian carriers have unlimited rights to fly from anywhere in Canada to any point in the United States. U.S. airlines enjoy similar rights to destinations other than Toronto, Montreal and Vancouver. Equal access for U.S. carriers will be phased in over three years. The arrangement will mean better connections and more competitive pricing for both passengers and cargo.
Complementing the agreement is the “Border Management Accord,” a planned expansion of pre-clearing facilities to allow travellers to the U.S. to clear customs before leaving Canada.
North American Air Links (in hours/minutes)
New YorkChicagoLos AngelesMexico CityHalifax to:2:152:546:017:15Montreal to:1:172:186:246:40Toronto to:1:261:405:164:50Winnipeg to:3:351:505:456:15Calgary to:5:053:053:006:29Vancouver to:5:533:522:456:19
Intermodal
Intermodal transportation combines the attributes of more than one mode. Increasingly, intermodal services are competing with trucking companies for transborder traffic. Railways are making important investments in intermodal terminals and equipment to ensure their competitiveness. Specialised container trains provide timely, high-quality service to Canadian and U.S. cities. CP Rail has direct access to the port of Philadelphia via one of its U.S. subsidiaries. Access to other U.S. ports is available through interchanges with U.S. carriers.
Strong Support Services
Massive North American trade flows have spawned extensive support services for Canadian companies that ship to the U.S. and Mexico. Customs brokers are familiar with all aspects of international shipping, from packaging and labelling requirements to the relative cost-effectiveness of different routings to and from Canada. Freight forwarders consolidate shipments from several sources to take advantage of volume discounts and design efficient and cost-effective distribution systems.
Companies doing business in Canada also benefit from a nation-wide system of 142 privately-owned warehouses licensed and bonded by the federal government. Warehouses in all large metropolitan centres offer on-site customs inspection, bar-coded storage and handling, and after-hours clearance.
Efficient Border Crossing
The Canadian and U.S. governments are actively co-operating to streamline the border crossing process. Programs that use electronic data interchange, bar-coding technology and pre-clearance of goods are speeding up the release of shipments. These innovations make it even easier for companies located in Canada to export to the U.S.
“Pratt & Whitney has a world-wide distribution network. Customs operations have been streamlined to the point that the Canada-U.S. border plays no role in our distribution system…”
Brian McGill, Director of Transportation
Pratt & Whitney Canada Inc.
Future Directions
With the NAFTA and the modernised, efficient transportation links throughout the continent, the entire North American market is easily served from a Canadian-based company. Foreign investors from outside North America should therefore look upon a Canadian location as an entry into all regional markets of the NAFTA countries.
A number of U.S. multinational enterprises — 3M, Dow, DEC, IBM, Bell Helicopter-Textron, and Procter and Gamble — have already made moves toward serving the North American market from Canadian subsidiaries. To create economies of scale in manufacturing, these subsidiaries are being given North American or global mandates. There will undoubtedly be more examples of this trend in the near future.
As the number of NAFTA signatory countries expands, the market will become even more attractive. Negotiations are currently under way for Chilean accession to the NAFTA, and other South American countries have expressed interest.
The North American Free Trade Agreement–An Overview
Background
The North American Free Trade Agreement, (NAFTA) has, since it became effective on January 1, 1994, created a free trade area comprised the United States, Mexico and Canada. The agreement’s major objectives are to eliminate tariffs, to improve market access to the goods and services among NAFTA countries, to eliminate barriers to manufacturing, agricultural and services trade, to remove investments restrictions, and to protect intellectual property rights. It also addresses labor and environmental concerns.
The U.S.-Canada Free Trade Agreement (CFTA) has been effective since January 1, 1989, and the NAFTA expands this agreement within services, investment, land transport, intellectual property and government procurement, but keeps the status quo in agriculture and energy.
NAFTA negotiations represented an opportunity for the U.S. to achieve its economic objectives: expanding sales opportunities in Mexico for U.S. companies; formalizing recent Mexican market liberalization initiatives; and enhancing North American international competitiveness by permitting companies to establish operations anywhere in North America without facing the obstacles caused by trade or investments barriers.
For Mexico, the agreement represented a turning point in its relations with the U.S. By entering NAFTA, Mexico turned its back on decades of nationalism and economic protectionism and culminated its move from a nationalized, protected economy to one governed by market-oriented principles.
Canada’s participation in the Agreement can be seen as a defensive maneuver to ensure that NAFTA would not dilute the Canadian benefits of origin of goods so that free trade status is effective among the NAFTA countries. Generally, 50 % of the tariffs between the U.S. and Mexico has been eliminated immediately, 65 % will be by 1999. Most U.S.-Canada tariffs will be phased out by 1998.