Blog: NAFTA -Trade agreements
Current geopolitics end globalization trend – a flexible logistic service provider is the answer
Globalization being the trend of the last decade, current geopolitics motivated by protectionism have put a stop to that. This has had a direct influence on supply chains. Creating challenges, but also new possibilities. Key to this is flexibility.
Important to have logistic resources
Negotiations involving the North American Free Trade Agreement (NAFTA) bring a lot of insecurity at the moment: there is no saying where it will be heading. What is clear is that the F in NAFTA seems to be no more. Having a serious impact on import and export and thus supply chains.
But before making a drastic change like changing focus from the international market to a national market, do realize that despite all trade frustrations the USA is still the biggest consumer market for Europe. And Europe the 2nd largest market for the USA (even after the Brexit).
When you decide to await the negotiations it is however important to have logistic resources/partners who are able to react fast and flexible to the changing regulations. The ability to up- and downscale is crucial in this.
Canada and Mexico opening borders
Where protectionism ‘closes’ the American market, other doors open. Both Canada and Mexico are doing the opposite of their neighbor, namely opening their borders by stimulating new trade agreements with the EU. Whether you export from or import to these countries, trade tariffs are set to almost 0% both ways. And thus becoming a good alternative.
The Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada removes duties on 98% of products. It ends a lot of red tape saving time and money, for example, by avoiding duplicative product testing requirements, lengthy customs procedures and costly legal fees. The agreement also offers greater mobility for company employees. The EU-Mexico Agreement makes practically all trade in goods (including agricultural) duty-free, customs procedures are simplified, and it lays down progressive rules on sustainable development.
Flexible logistic service provider
Are supply chains effected by current geopolitics? Yes. Key to maintaining a healthy supply chain is flexibility: being able to react quickly is crucial. So make sure you are ready for different scenarios, having the possibility to up- and downscale your activities quickly. A good logistic service provider can help you with that.
When it comes down to the current trade agreement negotiations be informed and keep an open line to parties involved. Come to the next CSCMP conference in Nashville, USA this October where you will find all supply chain professionals in the business. A great opportunity to get inside knowledge and meet the people behind the supply chains. HIDC will organize a session at the conference together with the Port of Rotterdam on the Brexit and geopolitical developments.
Need a flexible partner to deal with geopolitical turmoil? The Netherlands is the answer.
Stan de Caluwe
July 9th 2018