Forwarders’ Forum: Taming the Trump roller-coaster

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Brandon Fried is the executive director of the U.S. Airforwarders Association

As a roller-coaster climbs the steep track to its crest and subsequent stomach-dropping plunge, my eyes always fixate on that sign near the seat that says, “Keep your arms and legs inside the car at all times.” Good advice not only for fun park rides but also when encountering unpredictable situations, such as the recent contentious American presidential election. Like a roller-coaster on its initial climb, the first weeks of the new administration have brought a sense of uncertainty, anticipation and perhaps exhilaration because, regardless of your political leanings, the reality is that 2017 is shaping up to be one heck of a ride.

World trade serves as the backbone of our economy and of the forwarding industry. Therefore, those in the airfreight business paid attention to the new President during his campaign as he singled out the North American Free Trade Agreement (NAFTA) as ripe for gutting and renegotiation, while, at the same time, all but extinguishing prospects for the United States joining the Trans-Pacific Partnership (TPP). Hopefully, these promises will not kept because, if they are, our nation risks the dire consequence of a trade war that could not only hurt American prosperity but – as the Great Depression and World War II showed – bring us closer to a descent into the unimaginable.

FedEx CEO Fred Smith recently cited findings that NAFTA makes the United States $127 billion richer each year and that private-sector jobs have increased by 32 percent since the trade agreement between the U.S., Canada and Mexico began in the early 1990s. But even the most permanent structures can show evidence of age. Perhaps NAFTA needs enhancements to reflect today’s economic realities, including allowances for e-commerce, cross-border data flows, environmental issues and global supply chain demands. The agreement needs updating to continue its success, not the hit job being planned inside the White House.

Smith said that the relationship between China and the U.S. is highly interdependent, and that the two largest economies in the world have many common interests and challenges. But China’s trade policies – including its investment in state-owned companies, intellectual property violations and cyber-espionage – should be of grave concern to American interests. He warned that China must understand that, under a Trump administration, such practices will have stronger, more rapid consequences. This behavior, he added, is why he hopes that the Trump administration will take another look at the TPP – an agreement that does not include China, but contains provisions for modern economic realities that benefit the U.S., while encouraging other countries to avoid China’s commercial practices.

Many view trade agreements as a detriment to our economy. To those who have lost jobs or business to overseas competitors, this view may seem logical. But technology has, and will continue to have, a profound effect on all segments of our personal and commercial lives. In a globalized market, the competition comes from companies in other countries, not just from around the corner. So, trade agreements that come with enforced provisions, such as worker retraining and other assistance programs, are necessary to create a fair playing field for the jobs of tomorrow.

But there is reason to hope for airfreight forwarders. The new administration has pledged to make the long-overdue investment in our nation’s transportation infrastructure. Our nation’s roads, railroads, airports and bridges need improvement and expansion. These structures serve as arteries for trade, and if they are allowed to deteriorate any further, the results will work against our shared goal of prosperity. Of course, finding the US$1 trillion necessary to complete the monumental task over a 10-year period promises to be a challenge, as funding solutions are scarce.

In “Donald Trump’s Contract with the American Voter,” the new President proposes six measures in his first 100 days in office. One of them includes a requirement that, for every new federal regulation, two existing regulations must be eliminated. Forwarders and their shippers know that the ever-growing regulatory burden borne by the commercial sector has become cumulatively overwhelming and burdensome. Not every perceived problem needs a regulatory fix, as the past years have shown. If there is any common ground that the logistics industry shares with President Trump, it is the belief that we cannot regulate our way to prosperity.

While the new administration works to resolve the regulatory clutter in Washington, forwarders strongly urge an ongoing push for harmonizing import, export and security rules with other nations. Fair trade and the protection of our interests against those wishing us harm begins outside our borders by keeping regulations similar and easy to follow. We hope the proposed Air Cargo Advanced Screening rule, now expected in the beginning weeks of the new administration, reflects this commitment.

The inauguration is over, the people have spoken, and now we must unify as a nation to become more prosperous. The forwarding industry anticipates playing a key role, working with lawmakers in Washington to make sure the future is less of a roller-coaster ride and more like a steady course.

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