More changes are on the horizon. Ten years from now NAFTA will likely be superseded by the Free Trade Agreement of the Americas, an agreement that includes the Western Hemisphere countries from Canada to Chile. The latest round of negotiations among 34 countries on this expanded FTA occurred in 2003, and initial talks started in 1994 with the Summit of the Americas.
The FTA of the Americas, otherwise known as ALCA-FTAA, will establish a common set of rights and obligations around market access, agriculture, services, investment, government procurement, intellectual property, competition policy, subsidies, antidumping, countervailing duties and dispute settlement. Countries will also be allowed to engage in bilateral agreements within the FTA.
NAFTA is a necessary steppingstone to remain competitive in the world market. Lowering supply chains costs is no longer optional in today's world — it's a must to remain in business. As trade and logistics costs continue to increase, companies must find new ways to limit costs that are within their control and use economic trends to their advantage. FTAs, and NAFTA in particular, represent an economic trend that companies can use to limit global trade costs and improve their competitive advantage. With your business' future at stake, how can you afford not to?
About the Author: Jim Preuninger is the CEO of Management Dynamics, Inc., a provider of global trade management solutions for enterprise and logistics companies. More information at www.managementdynamics.com.