PPAS Trade Patterns & Platforms March 10, 2011

Trade requires infrastructure The infrastructure of trade can be physical It can also be relational It is this latter form of infrastructure we will be primarily focusing on in this class

Regions of Trade? A major feature of North America is that most of the logical corridors through which trade flows and along with trading regions are built run north south. Another major feature of North America is that the borders that delineate the three countries on the continent run from east-to-west. There is therefore an inherent contradiction between political geography and economic geography in North America

The challenges posed by this contradiction can be explored by studying the evolving supply chains and value chains in North American commerce A supply chain is: – The series of value-adding services, processes, information, and financial flows that generates final products and distributes them to end users; vectors for reducing costs and improving economic efficiencies, highlighting the interplay of economics and geography on industrial organizations.

One of the aims of CUSFTA and later NAFTA was to allow for the rationalization of supply chains and with this, increased productivity and competitiveness for the entire NA economy CUSFTA was initiated in Canada as a response to – threats (US protection) – opportunities (the digital revolution) – transportation changes (e.g. containerization) – competition from non-NA firms and just-in-time manufacturing (would either import or become more competitive so they would locate here)

Coordinating operations on a continental scale is tough and some firms have succeeded others have failed. This coordination occurs through supply chains Supply chains are essential organizations that are linked so as to produce something and the production of something is said to be done in stages (value chains) where new value is added at each stage. A value chain forms a link in the wider supply chain and might have five steps: Inbound logistics -> Operation->Outbound logistics->Marketing ->Service

One way to look at changes in supply chains is how often a product moves and how it moves The present manufacturing system requires a highly reliable and efficient system for moving inputs and outputs that is generally achieved Border hardening has put that in jeopardy to some degree

So what is our policy with regard to transportation corridors? – Fragmentation again Sea to Sea vision vs. North South Realities? Free trade and the conveyor belt on wheels 9/11 and car strangled spanners, – If we are going to take more time on each crossing vehicle then we need more crossing points The new response Gateway and Corridor strategies post 2007 e.g. –

Perhaps no issue touches on the complexity of supply chains in a continental economy spanning three nations better than food safety. – Preventive strategies – Response strategies Food safety must be a partnership between governments and producers

Food safety can be a covert trade barrier One way to prevent this is to insist that decisions be based on science, so called: “sanitary and phytosanitary measures or SPS’s are at the core of food safety. WTO has tried to come to terms with this both in terms of food safety and measure to protect plants that produce food from human induced threats NAFTA requires harmonization not common standards