Founder and Managing Director of nipanoato accompany multinational corporations through expansion and transformation efforts.
Over the past few decades, globalization has cemented itself as the way international affairs are done. Predicated on the idea of a world without borders, it promotes greater economic integration and cooperation among nations, regardless of geographical divisions. Fostering this interdependence has proven critical to unprecedented economic growth and development around the world.
This “world without borders” is showcased by three North American countries with one of the most important commercial relationships for global trade and an unparalleled trade agreement: USMCA, which replaced NAFTA in 2020. This regional bloc goes beyond simple diplomacy to bring trilateral commercial reciprocity, significant geographic advantages, and cultural and economic similarities—integrated into an innovative and collaborative vision.
What makes us strong?
This integrated vision enhances strong regional commercial dynamism and leverages existing geography where current cross-border business flows make the U.S.-Mexico border the busiest land border crossing and the U.S.-Canada border the longest shared border in the world.
The region was enhanced by its rich natural resources and its dual exposure to the Pacific and Atlantic Oceans, facilitating trade with other continents. Trade is then supported by fast logistics infrastructure that moves goods across borders with ease. This geographic proximity is further strengthened by the fact that all three countries operate in similar time zones, making cross-border transactions more accessible and manageable.
North America also has a considerable demographic advantage. Mexico has a steady supply of young, high-skilled workers, while the U.S. and Canada have plenty of high-paying jobs in developed industries. Thus, when the multiple data sources for Mexico, Canada, and the United States are combined, the talent and expertise of their workforce totals approximately 207 million employed people, accounting for approximately a quarter of global GDP (approximately $26.3 billion). This helps position the region as one of the most competitive, innovative and productive in the world. The three countries are also each other’s largest trading and foreign investment partners, forming an integrated production platform.
The regional economic powerhouses we see today have their roots in the North American Free Trade Agreement (NAFTA) enacted in the early 1990s. NAFTA was a landmark trilateral agreement that overhauled trade relations and deepened economic integration by eliminating most tariffs and opening up trade. Trade flows of goods and services continue to increase under the renegotiated USMCA. This decades-long shared history is the backbone of North American cooperation and the ability to sustain larger, more ambitious initiatives moving forward.
Reaping the benefits: business and regional economic integration
In the current global geopolitical landscape, trade relationships actually reflect a shift towards more regional and local operations. The nearshoring trend reflects this. Specifically, Reuters According to the report, 45% of business leaders (download required) consider relocating manufacturing a top priority.
While this might seem on the surface to go against the premise of a borderless and globalized world, trilateral agreements such as the USMCA prove otherwise and demonstrate how cooperative and commercial relationships between nations continue to be the backbone of global trade. Globalization has not disappeared; it has only begun to change its geographic connections.
To successfully reap these benefits, your business should prepare for greater integration through a triple approach that focuses on business practices, people and, to a lesser extent, government. First, you should leverage existing business-friendly frameworks and USMCA’s duty-free trade to facilitate reshoring jobs, diversify sourcing, and invest in cross-continental infrastructure and innovation projects. I think companies should also start crafting and promoting narratives internally that effectively connect their success to tangible, human-centered outcomes, humanizing the way employees already benefit from integration efforts. This helps build more support at all levels of the business and reframes regional cooperation in a more positive way.
Second, you should take advantage of the regional population and consider additional visa sponsorships — such as TN-NAFTA Professional visas, H1B or L visas — to increase your chances of securing skilled candidates with specialized technical knowledge. This facilitates greater workforce mobility, training and professional development, and helps advance the accreditation of professional and academic credentials earned in any of the three countries.
Third, your business should use its leverage at all levels and engage in dialogue with government representatives to promote a continued pro-trade legal and political environment for such relationships to flourish. This includes modernizing border infrastructure through greater digitization and streamlined cross-border processes to speed up the movement of goods, services and people without sacrificing security. Lobbying can be a useful tactic, but it is not synonymous with relying on the government to make changes. In the absence of political action, companies must be proactive in realizing this collective vision through their own business operations.
Collective North America
A collective North America is not one that seeks political or geographic integration, but one that seeks the alignment and internalization of shared principles and values to move the region toward greater synergistic exchange. This is deeper economic integration, and policies that reduce economic friction, stimulate trade and investment, and recognize the North American workforce as a cornerstone of integration efforts.
Companies that can successfully leverage North American commonalities while strategically reducing their differences will reap myriad benefits, helping to position themselves as the driving architect responsible for shaping North America’s collective future.
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