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 Business News | December 2006 
Executives Explore Free Trade Issues
 Rick Alm - Kansas City Star
| | International trade issues affect area companies such as Wagner Industries, an importer of Corona beer. (Jim Barcus/Kansas City Star) |
More than 70 U.S., Canadian and Mexican government and business executives met in Kansas City this week to debate and nurture their evolving trade relationships.
Participants in the second annual North America Works conference were also looking over their shoulders at the global competition, which isn’t standing still.
Trade among the three nations has increased 172 percent after 12 years of the North American Free Trade Agreement, said Eric P. Farnsworth, vice president of the Council of the Americas, based in Washington. But he noted that over a slightly longer period, China’s booming economy was up more than 2,500 percent.
“Yes, NAFTA has been a success,” said Farnsworth, “but we could soon find ourselves noncompetitive” in the global marketplace without continued growth and cooperation.
Sponsored by the Council of the Americas and Kansas City’s International Affairs and Trade Office at City Hall, the three-day conference that closes today offered forums and seminars on nuts-and-bolts issues ranging from trucking and cargo logistics to border security from terrorism.
Those issues are becoming increasingly important to local companies involved in moving goods, such as North Kansas City-based Wagner Industries Inc., which has warehouse, packaging and freight transportation management operations in seven U.S. cities.
Another Kansas City-based company interested in the conference was cargo broker Priority Logistics Inc. Co-owner Dave Burdick said his company early next year will begin testing new state-of-the-art cargo tracking and security systems that monitor shipments en route.
Also at the conference, defense technology giant Lockheed Martin said it will launch a similar threat detection and cargo tracking system, probably next year, using military systems Lockheed first deployed in Iraq. A Lockheed official said Friday that its U.S. pilot project for the system will include a tracking station in Kansas City.
Another conference speaker, Stephen Blank, a trade expert at the Lubin School of Business at New York’s Pace University, said such advances will be necessary to keep the continent’s trade on the upswing.
“A perfect storm is beginning to build,” Blank said. “Economic growth in North America is forecast to double the freight coming into U.S. ports and to increase freight shipments by 70 percent during the next decade. Without significant upgrade, the system will not meet this challenge.”
Mayor Kay Barnes and other area officials hope Kansas City will provide some of the new trade infrastructure urged by Blank, which would position Kansas City as a continental pivot point in the flow of goods.
Mexican officials have approved a plan to establish — in Kansas City — the first foreign customs inspection office on U.S. soil, to speed the flow of goods through the U.S. to Mexico. But the project is stuck in U.S. diplomatic channels. This year’s tumultuous elections in Mexico, marred by continuing post-election protests and violence, may be slowing U.S. approval. Growing U.S. concern over Mexican border security is an issue as well.
Kansas City SmartPort Inc., a nonprofit coalition of shippers, warehouse operators and others, had once hoped to have the facility opened and leased to Mexico by now on land near Kemper Arena in the West Bottoms.
New demands from Mexican negotiators also may be complicating U.S. approval.
In an interview Friday in Kansas City, Hector Marquez Solis, Mexico’s NAFTA minister in Washington, said his nation is now pushing for a U.S. customs operation in Mexico that would similarly hasten the flow of Mexican goods across the border to U.S. and Canadian markets.
The idea was originally one-way into Mexico, Marquez said. “It has to be two-way,” he said Friday. “This is a concept we want to explore.”
Marquez also said border crossing issues and delays must be eased. “Kansas City is an alternative only if trucks can go directly to their destinations and not stop at the border,” he said.
SmartPort’s president, Chris Gutierrez, said Friday that SmartPort’s position “is to make sure it happens for Kansas City.”
Meanwhile, tension has grown at City Hall since the customs project disappeared into diplomatic limbo.
“There is extreme frustration on our end,” said Jody Edgerton, director of the city’s International Affairs and Trade Office.
At least one Mexican businesswoman dismisses the notion that civil unrest in Mexico is an issue.
“Only 10 percent of the people are protesting” the election’s narrow outcome, which on Friday resulted in free trade proponent Felipe Calderon being installed as the nation’s president, said Daniela Ochoa of the Exvall group in Morelia. And Ochoa claimed that many of those protesters are being paid by anti-Calderon forces.
Marquez also discussed jobs Friday in his keynote address. He said a key challenge facing the Calderon administration is how to increase employment opportunities, especially in Mexico’s southern states, where political unrest has turned violent.
It is in America’s best interest for that to happen, Marquez said. If the purchasing power of Mexico’s young population can be boosted, a “huge pool of potential customers” will enter the world economy.
To reach Rick Alm, call (816) 234-4785 or send email to ralm@kcstar.com.
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