Recommendations for Investments in Competitiveness
North America has become more integrated, more efficient, more productive, and more competitive over the past 25 years.
The North American Free Trade Agreement (NAFTA), according to a recent report from the George W. Bush Institute in Dallas, Texas, has brought clear benefits to all three of its member countries, the United States, Mexico, and Canada. According to the institute’s 2016 North America Competitiveness Scorecard, North America continues to be the world’s most competitive economic region.
“Removing barriers to trade and investment throughout North America has enabled our businesses to create truly regional–and more productive–supply chains and manufacturing platforms,” the report noted.
The institute maintains that NAFTA has been an unqualified economic success for all three of its participants. “If we are to maintain our global lead, though, we need a strategic plan and renewed efforts to work together, from the leadership level to community collaboration,” said the report.
The institute has proposed two long-term investments in areas that form the backbone of North America’s future competitiveness. Both, it claims, are critical to driving regional growth and both offer a high return on the investment.
The first recommendation would establish a North American Border Infrastructure Bank to drive a market approach to planning, financing, and coordinating border projects. The infrastructure bank would deploy innovative lending instruments and minimize the risk in border infrastructure projects. The bank would be empowered the bank to assume a neutral and non-regulatory coordination role for transnational projects to reduce the time and resource burden on national and sub-national entities of convening stakeholders to execute complex border projects.
The bank would promote projects that facilitate the $2.4 billion worth of goods that move daily between the United States, Canada, and Mexico. “That is the equivalent of more than four percent of U.S. GDP moving across North American borders every day,” the report noted. “However, the U.S. economy alone loses nearly $8 billion in output every year due to inadequate border crossing infrastructure, insufficient staffing, or inefficient security and customs procedures.”
A North American infrastructure bank would enable prioritization of projects according to objective market data, not political criteria, according to the report. The bank would also facilitate coordination among agencies and entities building border projects, helping projects come in on time and at cost.
The second recommendation is to “expand access to common technical credentials for frontline work in manufacturing and logistics”
This would enhance the productivity of the supply chain by establishing recognizable training criteria so employers know what skill level an applicant brings to the job and would also expand the delivery system for credentials throughout North America by strengthening regional ties among career technical training and certification bodies, sharing best practices, and leveraging respective assets.
This recommendation focuses on preparing young people for employment in growing sectors of the economy such as advanced manufacturing and modern logistics. This approach would address long-term labor market shortfalls in North America, improve lifetime earning potential for workers, and contribute to national and regional productivity.
“The greatest opportunity for North America is in the sectors that have formed regional manufacturing and service clusters in advanced manufacturing and logistics,” said the report, “sectors that are generating demand for skilled frontline workers in all three countries but lack candidates with sufficient skills to fill them. Certifications for these skills are applicable to over 70 percent of the jobs in manufacturing and logistics and can be delivered effectively through low-cost, flexible certificate and technical training programs.”
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