The Speculated Advantages and Repercussions of the NASCO Superhighway – Athens State University

The Speculated Advantages and Repercussions of the NASCO Superhighway: A Topic Embroiled in Controversy

Joshua Cote
Athens State University

Abstract

International trade and the current period of globalization have placed increasing pressures on businesses to find cheaper methods of international distribution to increase profits and lower costs. Many organizations and multinational corporations are backing the creation of the efficient multimodal North American super-highway corridor from Mexico, through the United States, to Canada. A recently created organization which plays a key role in the establishment of a super-highway corridor is NASCO (North American Super-highway Coalition). Also, NAFTA (North American Fair Trade Agreement), an act passed by congress in 1994, allows for less restrictions of the movement of goods through national borders, lower tariffs on imports, and opens a new flood of trade capabilities. However, a project this big does not come without opposition, and although it has gained a lot of support from the major importing and distribution companies, many people believe that the super-highway legislation accompanying NAFTA’s growth will have a negative impact on the U.S. and taxpayers. Those who have come to oppose the creation of the North American super-highway corridor have cited, amongst other things, their worries about the mega infrastructure project advancing drug trafficking, illegal immigration, and eliminating border controllability. More questions also hang over NASCO’s endeavor: will the United States actually be able to afford such a large expenditure, and how much will the super-highway corridor strengthen America’s ability to increase its domestic manufacturing?

Figure 1: (Corsi, 2007)

A Blog Post by: Jerome Corsi from 2007

The Speculated Advantages and Repercussions of the NASCO Superhighway: A Topic Embroiled in Controversy

What is NASCO? What are NASCO’s plans and how do they hope to accomplish them? How did it start? What are the associated costs? Who will pay for the endeavor and will it be self-supporting? Who will benefit? What kinds of political maneuvers are going on in the background to move plans forward, and what kinds of sub organizations exist to create its strategies and implement them? These are very important questions which must be examined before one can fully delve into a controversy as involved as the North American Corridor. NASCO, or the North American Super-highway Coalition, was created in 1994 (Trunick & Miller, 2004, p.25). According to research conducted by Jerome Corsi (Harvard graduate with a Ph.D. in political science), a writer for Human Events, NASCO is an organization spanning across the United States (and the western hemisphere) which hopes to address and fix the problems in transportation and trade between Mexico, the U.S., and Canada through an enormous chain of investors, businessmen, universities, and politicians (2006). According to NASCO’s Outlook issue 2012 by Francisco Conde (2012), to accomplish its goals, NASCO stresses the improvability of three core areas: “transportation innovation and security, energy efficiency, and logistics workforce training” (p.5). The outfit is a 501c6 (an Internal Revenue Service Code) organization. The category represents all groups and organizations which operate as a charity or a non-profit agency (Corsi, 2006). Its main contributors include both the private and public sectors, and its main goal includes plans of energetic actions to promote, fund, and construct a super-highway corridor that stretches 2,500 miles (mainly on Interstates 35, 29, 80, and 94) (Trunick & Miller, 2004, p.26). The mega infrastructure project will be multi-intermodal, meaning that it will include many different forms of transportation (i.e. railroads, highway, airplane, and water routes), and will become a main artery of distribution affecting 71 million people and accounting for nearly 1 trillion dollars in total commerce between the three nations supporting it (North America’s Corridor Coalition Inc.). The highway will run through 17 states, five Canadian Provinces, and seven Mexican States (Conde, 2012, p.2).

Members and Sub-Organizations

A list of NASCO board members can be found on their website. These members vary in nationality, state or province, and fields of expertise. This allows NASCO to work on the project with a network of versatile and knowledgeable contacts. NASCO’s members are employed in a variety of different professions which have a direct relationship with NASCO and its goals (North America’s Corridor Coalition Inc.). The executive board includes: Gerald Schwebel as its President (also executive vice-president of the International Bank of Commerce); George Blackwell as the previous President (also an attorney for Blackwood, Langworthy, and Tyson); Andre Meloch as the Assistant Deputy Minister (also the Ministere des Transports of Quebec); Steve McElhiney as the Treasurer (also the President for EWI Risk Services, Inc.); Kyle Burns as the Executive Officer at Large (also the President and CEO of the Free Trade Alliance); Russell Laughlin as the Secretary (also the Senior Vice President for Hillwood Properties); Rider Scott as the NASCO Vice President of the USA (also works as an attorney for Strasbourg and Price); and Doug McNeil as the NASCO Vice President of Canada (also works as the Deputy Minister of Manitoba Infrastructure and Transportation) (North America’s Corridor Coalition Inc. #2).

As of December of 2012, NASCO is supported by 95 members including insurance companies such as EWI Risk Solutions, third party logisticians (i.e. G2 Logistics), the International Bank of Commerce, Burlington Northern Santa-Fe Rail Road Company, and ten inland port members (such as Port Authority in Kansas City Missouri, Port Corpus Christi Authority, and the Port of Lazaro Cardenas in Mexico) (Conde, 2012, p.2). Many of the tri-national NASCO members aiding and collaborating with NASCO are from the United States. However, Mexican and Canadian businesses also chip in. They have similar roles to fulfill, compared to the companies from the U.S., for their pieces of the superhighway and other research. The importance of the positions and companies that the board members work for becomes especially important when discussing who gains and who loses to the construction of the super-highway corridor and the pros and cons of its establishment.

Another major contributor to NASCO’s efforts is members of the NEC, or NASCO Educational Consortium. The NEC is comprised of colleges from Canada, Mexico, and the United States. There are twenty-five universities and community colleges involved in aiding NASCO through research. Among these universities are specialized transportation and logistics institutes such as the Transport Institute at the University of Manitoba, Midwestern Transportation Consortium, Montreal Logistics Institute, and the Texas Transportation Institute. Some other well-known universities are the University of Iowa; the University of Kansas; the University of Texas at Dallas (and Austin); Kansas State University; the University of Windsor; the University of Juarez in Durango Mexico; and the University of Pittsburgh. What can colleges provide to the organization? Members of the NEC conduct and develop freight transport research along the corridor network and harmonize their research to gain further insight and help students get a working experience in transportation (Conde, 2012, p.13).

Support for NASCO, its goals, and the corridor can also be found amongst cities, counties, and even states which mainly fall along the super-highway’s path. The Mexican States that are members of NASCO are Chihuahua, Durango, Hidalgo, and Michoacán. The cities and counties in the United States which are associated with NASCO are the cities of Austin, Texas; Arlington, Texas; Bell County, Texas; Denton County, Texas; City of Denton, Texas; Fort Worth, Texas; Kansas City, Missouri; Laredo, Texas; Temple City, Texas; Tarrant County, Texas; and Web County, Texas. The Canadian Cities and Provinces collaborating with NASCO are Brampton, Ontario, the Province of Manitoba, the Province of Ontario, the Province of Quebec, the Province of Saskatchewan, and Winnipeg, Manitoba (Conde, 2012, p.16).

NAIPN, or the North American Inland Port Network, is a sub-organization and involved supporter of NASCO. The committee began in 2003 as a way to unite inland ports in the hopes that the network will work together to “alleviate congestion at maritime ports and our borders” (“Corridors of the Future,” 2006). The committee will focus on green practices, sustainable industrial growth, information and trends in trade flows along the corridor in North America. It will also focus on the trade strategies of the tri-national partnership between Mexico, Canada, and the U.S., the largest infrastructure projects in North America, the “relevance of Foreign/Free Trade Zones on today’s liberalized (NAFTA) trade environment” (Conde, 2012, p.12). Also NAIPN members have helped modernize and create high-tech intermodal facilities with intelligent transportation systems such as CentrePort (Canada’s only inland port and foreign trade zone) and Kansas City SmartPort which is the second largest rail center in the nation, the third largest truck center in the nation, the largest FTZ in the nation, and has the largest underground warehouse area in the world (Trunick & Miller, 2004, p.27).

NASCO’s Mexican Committee began in 2006, and it was created to research, design, and implement a logistics information system. The effort, known as the National System of Strategic Logistics Platforms, will help Mexico’s Department of Transportation (SCT) and the Department of Commerce (SE) to comprehend the ever changing supply chains within Mexico and help it identify government policies which need to be enacted to help reinforce them and gain more economic competitiveness. The committee is also working to import the certificate programs which NASCO has developed in the U.S. to support the education of future logisticians (Conde, 2012, p.14).

Programs

NASCO hopes to improve upon many aspects of logistics and distribution to further their cause for an intermodal network. The areas which require steadfast improvement, according to NASCO, include transportation modernization and international improvements in border security, working with colleges and universities “to prepare a trained and certified workforce in logistics and global supply chain management and operations,” and working toward newer and more efficient means to enhance distribution to keep the atmosphere as healthy as possible (Conde, 2012, pgs.6-12). How does NASCO hope to accomplish such daunting and expensive goals?

NASCO, in its effort to improve Intelligent Transportation Systems (ITS) and border security, endorses and presses the three countries to create and enact legislation which will help fund new infrastructure, lessen international trade restrictions, and loosen control of the flow of goods over their borders. It also works with federal agencies to advance and apply new information systems and technology which aid border control. NASCO has helped the U.S. Federal Highway Administration Office of Freight Policy unveil a new system called the Freight Advanced Traveler Information System (FRATIS) which will, according to Conde (2012), “heighten efficiency, lower costs to businesses and consumers, enhance U.S. economic competitiveness, cut unnecessary travel, save energy, and reduce freight transport emissions.” NASCO has also worked with the Mexican Transportation and Commerce Departments by aiding in a study to advance Mexico’s National System of Logistics Platforms. NASCO, and its sub-organization the NEC, help Mexico’s department by helping them align both public and private freight transport facilities and capital with the nation’s corridors (Conde, 2012, p.7). NASCO has also helped Iowa develop and fund a project which helps communicate traffic and road conditions over the radio.

Another of its programs includes using technology to track the movement of hazardous materials along the corridors electronically and communicating that information to those companies who need to know about it (Trunick & Miller, 2004, p.26). This may help expedite HazMat shipments that are required to meet the Basel Agreement requirements (Sonak, Sonak, & Giriyan, 2008). Efforts have also been allocated to help the Ministry of Transport for Ontario introduce and press the New International Trade Crossing (NITC) agenda. The project involves creating new, higher tech customs inspection sites at the Ambassador Bridge close to Detroit, Michigan and Windsor, Ontario which will allow U.S. bound goods to be inspected by U.S. officials in Canada and vice versa for Canadian bound goods. Thus trade between the two nations will be more efficient, inspections more reliable, and will allow trade ties between the U.S. and Canada (already number one trade partners to each other) to strengthen and grow (Trunick & Miller, 2004, p.26).

According to Conde (2012), the population in the United States alone will grow by 100 million by 2050. Thus the need for an improved logistics workforce is a key necessity in NASCO’s plans to create corridors for the distribution of goods to the increasing population. Working with Hillwood Properties and its intermodal facility, Alliance Texas has invigorated and perpetuated training. Hillwood, through funding (2.8 million dollars) provided by the Department of Labor, has collaborated with the Texas Manufacturing Assistance Center and Manufacturing Skill Standards Council to create programs from which to certify workers ranging from entry to mid-level workers. The program will include three types of certifications: the CPT (Certified Production Technician), the CLA (Certified Logistics Associate), and the CLT (Certified Logistics Technician). Efforts to expand the availability of the education required to receive one or all of these certificates across the nation received a boost when, in 2010, a grant was awarded for a three year period. Also, the Obama administration helped enable the move to promote logistical training in June of 2010 when they announced a program to educate and certify 500,000 manufacturing workers over a five-year period (Conde, 2012, pgs.8-9).

Recently, a social and political push for “green” (or environmentally safe) technology and innovation has encompassed businesses’ and the U.S. government’s agendas. NASCO not only supports energy efficiency, but it also has helped pursue and identify the top practices for the reduction of negative impacts on the environment and has helped companies note some new technologies and methods which improve energy efficiency. It has also helped shape and expound on research with the Commission on Environmental Cooperation of North America (CEC). Their joint efforts led to an in-depth study publication on the “Sustainability of Freight Transportation in North America.” The study deliberates possible ideas to improve air quality along the NASCO corridor (Conde, 2012, p.10).

The NASCO corridor coincidentally runs along an energy rich area of North America. The corridor winds its way through “the highest-output wind energy capacity on the continent, conventional energy resources, and…the biggest unconventional shale rock formation natural gas and light sweet crude oil basins in North America.” The NEC member TUC Energy Institute has helped NASCO and TUC’s Natural Gas Vehicle (NGV) Consortium raise awareness about the benefits of using and integrating freight transportation from diesel to either compressed natural gas, liquefied natural gas, or a mixed (dual fuel) vehicle (Conde, 2012, p.10). According to the United States Department of Energy, some of the benefits of using vehicles which run on natural gas are: domestic production of natural gas makes up 87% of all of the used natural gas in the U.S., there are approximately 60-90% less smog producing pollutants in natural gas, its use reduces greenhouse gas emissions by 30-40%, and it is less expensive than gasoline. Some of the disadvantages of using natural gas are a limited vehicle availability, it is less available than gas and diesel fuel, and a tank full of natural gas does not last as long as gasoline (Source 19). With NVG and TUC’s collaboration, hopes to reduce the disadvantages of using natural gas, by propagating the expanse of natural gas fueling stations for freight trucks along the NASCO corridor, are steadily expanding as time goes by (Conde, 2012, p.10).

Politics and Funding

It is imperative also to outline the political issues involved with building the infrastructure, keeping it secure and environmentally friendly, and how the organization co-funds projects for the North American Corridor, Other questions for consideration include when and why did the period of deregulation become popular, what exactly is a super-highway corridor, what is the North American trade paradigm, and can the United States provide enough funding for the corridor initiative if the private sector helps chip in?

Pre-NAFTA legislation which has had a significant impact on state transportation planning is the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). This act changed city and state road planning to ensure that states adequately provide thoughtful means for the movement of goods to, from, and through the cities and states of the U.S. by freight (Field, 2002, p.5). Although the act leaves room for the states to decide their planning methods, the Federal government requires that they plan for freight movement which makes this the first road planning bill that forces states to gear roads to distribution. ISTEA provided approximately $155 billion which was to be used from 1992 until 1997. The bill also reformatted the Federal-Aid Highway Program from four subgroups: Interstate, Primary, Secondary and Urban, into two subgroups: the national highway system and the interstate system (“Intermodal surface transportation”, 1991, p.6). The enactment of this bill fostered the modern road system and has led to further legislation to reinforce its provisions. It also began the movement towards a multi-intermodal network.

As was stated earlier, NAFTA, the North American Free Trade Agreement, was passed in 1994. The agreement was made to alleviate friction and transportation times at the borders by lifting regulations and customs inspections and allowing foreign truck drivers to pass through borders and go straight to their destinations instead of the transporters being forced to drop their loads in a commercial zone. Mary Brooks and Pamela Ritchie’s research explores mergers and acquisitions between U.S and Canadian freight companies’ post-NAFTA, and their research presents reasons why companies undergo the merger process. They note that one major reason is to obtain economies of scale which, since NAFTA, have become more important and explains the increasing amount of mergers and acquisitions amongst transportation companies (Source13). A study by Richard Clarke examines the improvements in Mexican surface transportation methods such as rail and truck. He also notes that although the improvements are considerable, the adversity to change in the U.S. and Mexican politics of cross border trade have continued to hamper trucking abilities to maneuver beyond the commercial zones and penetrate into each other’s countries (2003, p.20).

What spurred NAFTA’s creation, one may wonder? According to Stephen Blank, the North American economic system, which began to take shape in the 1980s, was a result of “corporate strategies and investment decisions that focus less and less on national economies,” and a period of deregulation under GATT (General Agreement on Tariffs and Trade) (Blank, 2008, p.231). He adds that the interrelationship between companies in North America is now, more than ever, highly integrated and interdependent. For instance, those who view trade in North America as the distribution of finished goods across borders are only partially right, for, as time goes by, North American trade is increasingly becoming a highly complex system of trans-national production. What this means is that the flow of goods across national borders is mainly comprised of semi-finished goods which manufacturers send to and from one another in different regions or nations to produce a finished good. The two trade paradigms are paradoxical, and although the views are juxtapositional, they do not correlate nor fit together.

Thus, under these circumstances, the North American Free Trade Agreement complemented GATT’s deregulation and supposedly added to North America’s ability to compete in a global economy (Blank, 2008, pgs.231-232). Some of the benefits enabling the increase in competitiveness are portrayed in Mary Field’s “Highway Intermodal Freight Transportation.” Her research shows that after the period of deregulation commenced, railroad companies began becoming more profitable and were able to charge lower rates while at the same time air fares were decreasing and airlines were filling more of their unoccupied space (Field, 2002, p.4). The implementation of NAFTA is significant in that the crux of the North American system, as portrayed by Stephen Blank’s research, is the ability of the North American nations’ companies to distribute and transport their resources and semi-finished goods efficiently. Blank notes that a report produced by the U.S. Center for Strategic and International Studies and Fraser Institute of Canada relates the importance of freight transportation and the extent to which supply chains are deeply affected by border delays. So, theoretically, NAFTA aids the distribution process which therefore amplifies the success and abilities of North American supply chains. Furthermore, the idea of a superhighway is more clearly defined when applying the true North American trade system (Blank, 2008, p.232). One may no longer think of a superhighway corridor simply as roads and infrastructure for which to transport products, for a corridor (such as the NASCO corridor) expresses and represents the interweaving and continuously growing involvement of companies from different regions which distribute more than just products. Corridors connect ideas, information, and services, and cannot be mistaken for anything less (Blank, 2008, pgs.232-234). The idea behind using superhighway corridors such as NASCO is to focus economic development in the cities or states which are becoming important hubs in the North to South trade network. The hubs will create capital spending, require the infrastructure to support the hub, the creation of jobs, and one could argue that the corridor would create great economic growth within North America.

According to Carol Stabler, only five years after NAFTA was implemented, exports from the U.S. to Canada ($100.1 billion to $150.1 billion) and Mexico ($41.6 billion to $71.3 billion) increased substantially (Stabler, 1999). P.S. Dempsey notes that by 2004, NAFTA has led to a 191% increase in trade between Mexico and the U.S. equaling approximately $250 billion and a 400% increase of freight flow across the U.S./Mexican border (2001, p.91). Kelly Diep (2008) adds another perspective by allowing that the 157% rise in exports and the 231% rise in imports by 2009 were not completely caused from NAFTA. In fact, she notes that analysts believe up to 85% of the increases could have come independently from the agreement. Similarly, NAFTA’s role in the expansion of the United States’ (.04%) and Mexico’s (.8%) gross domestic product has also been overvalued and, in reality, has had little effect on the nations’ GDPs (Diep, 2008, p.9).

Another Act which plays an instrumental role in the formation of the new federal highway and interstate systems is the Transportation Equity Act for the Twenty-First Century (TEA-21). The passage of the TEA-21 accords funds to protect the environment, improve safety goals, promote economic growth, drastically expand and advance infrastructure, and allows for opportunities to be created for the American people. Senator Leftwich was the president of the coalition formed to push the TEA-21 agenda which was signed into law in 1998 by Bill Clinton. Again, the idea that acts upholding deregulation will lead to America’s ability to remain globally competitive played a significant role in pushing the bill through congress (Stabler, 1999). So, how did the act play a central role in the formation of the NASCO corridor? The goals of the TEA-21 are aligned with those of an international corridor, and the TEA-21 facilitates a massive budget for funding the projects it deems necessary to fulfill said goals. How much funding did these programs receive? According to the U.S. Department of Transportation, the TEA-21 provides $4.302 billion for improving safety projects, $12.268 billion toward environmental protection projects, $978 million for expanding opportunities programs, $316.3 billion for the expansion of infrastructure construction projects, and $1.416 billion accorded to the promotion of economic growth projects. In total, TEA-21 issued approximately $335.264 billion to be allocated towards its goals (DOT, 1998). This may seem to be a large number, but when divided evenly between the 48 contiguous states, this number shrinks to just under $7 billion. Is it possible that the funding provided by the TEA-21 act is not enough to modernize the interstate system into the new super-highway corridors?

The Security and Prosperity Partnership (SPP) arose from a conference in Waco, Texas between the big three NAFTA nations in March of 2005. According to a Congressional Research Service report, the SPP is “an endeavor by the three countries to facilitate communication and cooperation,” and “is distinct from the existing North American Free Trade Agreement,” (Villarreal & Lake, 2009, p.2). The highest priority for the SPP is to create reports for the NAFTA nations which aid the countries in collaborating and creating conformed policies to reinforce their free trade agreements (Blank, 2008, p.236). The SPP was created to evaluate border security measures, cargo security, transportation corridors, and national sovereignty. Their goals include researching traffic flows (especially at borders), ensuring product and food safety, increasing North American global competitiveness, and investing in clean energy and environmentally friendly vehicles. Thus the goals of the SPP should have aligned well with the idea of a super-highway corridor. However, the report notes that Congress disavows that the SPP has an involvement in plans for a super-corridor such as NASCO. Not only do they play down the SPP’s role, but they officially declared that there are no plans to initiate and build a so-called “NAFTA Super-highway,” (Villarreal & Lake, 2009, p.6). Therefore, the Security and Prosperity Partnership plays an invisible role in advancing NASCO’s agenda while claiming complete separation from super-corridor ideals.

The impact NAFTA has had on the states which the NASCO corridor runs through has given rise to significant amounts of legislation lobbying for funding infrastructure improvements. Texas, Oklahoma, Iowa, Minnesota, Kansas, and Missouri are the states most involved in collaboration efforts with NASCO and its ideals. According to Ken Miller (2002), these states, plus North Dakota, South Dakota, and the Canadian province of Manitoba, signed a Memorandum of Understanding in 1998 which focused on transportation technology and portrays their commitment to infrastructure improvements to their respective federal governments (p.14). Why, one may wonder, are these states so involved in the initialization process of the NASCO corridor? The simple answer is, since NAFTA, they have gotten a taste of the increased flow of goods, traffic, business, and lowered prices through their areas upon which they hope to capitalize. As a result of NASCO’s involvement and the NAFTA agreement, there are groups which have either formed or been proposed by these states, and legislation within the states has also been created to bolster its growth.

In Texas, significant traffic problems after NAFTA passed led to the realization that current infrastructure was unable to support the growth of trade. State legislators have proposed the creation of a Trans-Texas Corridor (TTC). Although the Texas Department of Transportation (the initial proposer of the TTC) is a part of NASCO, NASCO repudiates any connection with the Trans-Texas Corridor initiative other than supporting their decision to effectively alleviate congestion in the area and appropriate funds for new infrastructure. According to Jerome Corsi, Tiffany Melvin, an executive director for NASCO, allowed that NASCO does not intend to help fund new infrastructure projects such as the TTC because NASCO bases its goals on the improvement of existing interstates and highways (2006). The TTC-35 is supposed to be a multi-modal parallel corridor which will reduce traffic on I-35. The project will cost a total of $7.5 billion dollars and will be incrementalized over a 50-year time frame (“Corridors of the Future,” 2006). Additionally, agreements with Cintra Zachry, a construction company, were made in 2005 for Cintra Zachry to construct a segment of the TTC (from Oklahoma to the Gulf Coast). Thus, in return for paying Texas $1.2 billion, the private company receives rights to build and operate toll facilities on their stretch of the TTC (Corsi, 2006). Again, NASCO claims that the TTC is a completely separate entity from them. However, the TTC replicated what NASCO envisions as its goals, and it is likely that projects such as the TTC may find support amongst other adjoining states (i.e. Oklahoma) if they can afford it. The TTC, which has multiple, distinguished use lanes (freight lanes and passenger lanes) with six rail lines, ends at the border of Oklahoma. The project failed to pass into law in 2011 (Hoppe, 2011). However, support for the TTC is still strong, and businesses hoping to have an advantage in global trade will probably continue to push the TTC initiative.

Oklahoma, which I-35 intersects, budgeted $105 million dollars from the year 2007 to 2010 for road improvements such as bridge reconstruction and improvement, increasing the width of crucial roads, and road reconstruction. The Oklahoma DOT established its need to widen the interstate to six lanes for an eight-mile stretch to Cleveland County and to rebuild the stretch of I-35 from the southernmost region of Oklahoma City to the TX/OK state line in the 2005-2030 Statewide Intermodal Transportation Plan (“Corridors of the Future,” 2006). Oklahoma also completed a program in 1998 to lay 250 miles of fiber optic cable along I-35. Oklahoma officials established the fiber optic route to ready the state for smart technology (the future of logistics and distribution). Oklahoma is a direct supporter of NASCO and its goal of creating the super corridor. The fiber optics will, eventually, (if the corridor becomes a national initiative with little resistance) connect the corridor states. The state also began a $3 billion infrastructure program closely aligned to the needs of a super-corridor prior to 1999. Why does Oklahoma uphold the NASCO goal of a super-highway from Mexico to Canada? Oklahoma exports to Mexico and Canada are major sectors of its economy. Three years after NAFTA was enacted (1997) total exports to Mexico and Canada rose 36.1% and 99.1%. As a result of the increases, Oklahoma believes the NASCO initiative ensures Oklahoma’s ability to continue to remain globally competitive (Carol Stabler).

Minnesota and Iowa each have a section of I-35 running through them as well. Both have had significant growth as major centers of trade since NAFTA. For example, Iowan exports to Mexico and Canada grew by 19.9% in 1997 alone. Stabler’s research also indicates that the Pella Corporation (door and wood window supplier) built a new factory in Iowa because it is located on the interstates highlighted to become the NASCO corridor. These interstates connect its other factories together, creating an easily navigable transportation route, a new way to cut costs by lowering transport costs, and a way to cut the manufacturer’s customer fill rate (Carol Stabler). Minnesota is also strategically located on I-35 which connects to the Great Lakes (specifically Lake Superior) and Canada. Minnesota’s highly strategic location is emphasized when one figures in its connections with three important railroads, the Mississippi River, the St. Lawrence Seaway, and the many airports located in the area. So, how much money has the Minnesota’s government been able to accord to infrastructure improvements and repairs? In 2006 Minnesota’s DOT spent $260 million to fund improvements to I-35 west. They also set plans to budget $1 billion for road expansion and construction, and they accorded $35 million for safety improvements on I-35 through 2030. Sadly the Minnesota DOT also claimed that they are not able to fund everything that is considered in need of attention (“Corridors of the Future,” 2006). Funding for infrastructure projects such as those described in Minnesota continuously fall short of needs (or wants depending on how one approaches the subject) no matter the state or province.

A city along I-35 in Kansas which gained value from its location and added value to I-35 is Wichita. The city had experienced growth as a result of NAFTA because it hosts branches of multi-billion dollar industries. Boeing, Raytheon, and other aerospace and aircraft companies, which are crucial suppliers to the government and the transportation industries, have helped Wichita become more than a sign on I-35. Wichita became a supporter of NASCO, and its officials improved upon intelligent transportation systems so the city would continue to attract new businesses (Carol Stabler). Kansas City, Missouri/Kansas is one the largest cities which voiced its support for a NASCO corridor. The city was set to become a major hub city for through-goods due to NAFTA. The two major railways in Kansas City, BNSF in the western part of the city and KCS in the southern part of Kansas, became heavily invested in building modern intermodal logistics parks. The unique position of Kansas City, located on the Kansas-Missouri border along I-35, allows the city to use funding from both states. The state of Kansas set its budget for structural and transportation improvements through 2010 at $249.8 million while Missouri set funds for I-35 and I-29 improvements to $289.9 million through 2090 (“Corridors of the Future,” 2006). Richard Nadler proposes that since the NAFTA act passed, Kansas City, though it was already a strategic center for distribution, has become more aware of its importance. He also notes that the U.S. Treasury, keen on Kansas City’s important location, worked in 1996 to install what could be the future of customs facilities (1997). Richard Nadler believes that all Americans are benefitting from NAFTA trade. However, his claim has been rebuffed, not only due to his obvious bias as a citizen of Kansas City, (which stands to gain massive advantages) but also because of the redirection of transportation (Nadler, 1997). Since the City is a multi-modal hub, (with the Kansas City International Airport, the Kansas City Smartport, the two major railways (BNSF and KCI), and the Missouri river) it threatens to disrupt other U.S. cities’ flow of trade. Jerome Corsi notes that the idea is to bring goods imported to Mexico from China into the American interior through Kansas City. This will eliminate the need for these goods to first enter ports such as Los Angeles and Long Beach which increase the distribution costs, thus lowering the prices of foreign goods (Corsi, 2006). Cheaper goods are more affordable to many Americans, true. However, many Americans worry that deregulation and lowered tariffs are designing American manufacturing failure.

What are non-NASCO states and provinces doing to build up infrastructure? They are doing the same thing, of course. Stephen Blank notes that states in other regions are also trying to build up funds for their own respective corridors while competing with other states, such as the NASCO states, for funds from the federal government. This, in fact, is one main reason why a single corridor system will never be created (Blank, 2008, p.235). The other corridors include CANAMEX (a corridor running south to north along the west coast of the U.S. and Canada), CISCOR (a corridor running east to west along the Canadian and U.S. border), and the ROTCC (a corridor beginning on the west coast which runs due west and then turns northward and ends in Michigan) (Corsi, 2007). Each soaks up federal funds while simultaneously trying to build, which limits and lengthens the corridor processes. They should not be competing, because the corridors will help complement each other eventually; and squabbling about unfair government attention will only detract from the cause which will serve them all well.

Since NAFTA was implemented, there have been major events such as 9/11 terrorist attacks, drug border wars in Mexico, the Middle-eastern wars, and an economic recession which has shifted many Americans’ paradigms of NAFTA, deregulation, and the free flow of goods between the U.S. and other countries. According to Abraham Lowenthal (2010), Obama hinted that NAFTA may need renegotiating prior to his inauguration. For example, while he was campaigning, a free trade agreement between the U.S., Columbia, and Panama was being debated and reviewed. After Obama was elected, he expressed his hope that the agreement would go through. However, the administration and Congress kept pushing it back for review. The administration also sought to pull the plug on protectionism and tariffs, but instead, Congress and the administration accepted and endorsed a stimulus package with protectionist (buy American) legislation due to the flood of cheaper Chinese (or other Pacific Rim) goods. Canadian companies were deeply affected by the new tariff increases and incentives. The Obama administration has also upset the NAFTA agreement with Mexico by allowing to die a program which lets Mexican truck drivers operate within the U.S. and out of the aforesaid commercial zones (Lowenthal, 2010). The government has upset Mexico and Canada due to the new protectionist stance in the stimulus, according to Joel Kranc (2012), which has led to a renewed effort to strengthen the Canadian and American trade agreements. In December of 2011, Canadian and American officials agreed to “implement joint cargo inspection and clearance of goods that arrive by land, rail and sea by December 2012” (Kranc, 2012, p.69). Again, according to Villarreal and Lake, “the federal government…has stated that there are no plans to build a ‘NAFTA Superhighway’ that would link the United States, Canada, and Mexico with a ‘super-corridor’.” Their research also states, “Further, no legal authority exists and no funds have been appropriated to construct such a superhighway, nor are there current plans to seek such authority or funding” (pp. 6-7). Stephen Blank observed, too, that there has been no truly strong federal government initiative towards the envisioned NASCO corridor other than some minor improvements. He goes on to report that the general state of roads has actually been on a downward slope (2008, p.235). The economic recession no doubt crippled the weak attempts of the states to accrue funding from both the federal government and supporters from within the states.

Controversy and Analysis

Much of the information gathered here is an attempt to explain the controversy shrouding the NASCO corridor. How much support does a North American corridor and NAFTA have amongst the populations of each of the respective countries? Support for NAFTA and a NASCO corridor vary. Much of its support can be drawn from the states and areas which would benefit most by having a role in the transportation network. However, even some people amongst these intermodal hubs hold reservations about whether the corridor holds true to American, Mexican, and Canadian values. For example, since the U.S. clean energy movement, ethanol gas has become much more widely used. This is due to U.S. subsidies to grow corn. NAFTA brought down trade tariffs, so when the U.S. began to partially fund corn growth for increasing ethanol production, the Mexican farmers found it tough to compete against the invading cheap corn. She also notes Texan opposition to the super-highway. Poll numbers indicated a majority of support for NAFTA in Canada (70%) and Mexico (62%), but the U.S. polls showed only 49% of Americans supported NAFTA trade (Diep, 2008, pp. 9-10). Most opposition to NAFTA and the NASCO corridor arises from populists, conservatives, and anti-capitalists.

What do some people identify as positive and negative aspects of the mega infrastructure project? Supporters for NASCO and NAFTA trade include those who believe that tariff reduction will increase America’s ability to compete globally, prices on goods imported will decrease due to less restrictions at the borders, shipping costs in general will decrease, shipping times will dip, and North Americans will benefit because domestic products will be cheaper than foreign goods. Evidence that economic growth and transportation speeds may increase due to a system similar to NASCO (without all the improved technology) can be drawn from the importance of the German Autobahn to industrialization. As it stands, the Autobahn was highly successful in promoting economic growth (“How Did the Nazis Solve the Economic Problems They Inherited in 1933?” 2011). Those who repudiate NAFTA trade in the United States believe that U.S. domestic manufacturing will hemorrhage workers to Mexico because free trade agreements allow goods shipped to Mexico from China into the country at cheaper costs. Opponents to free trade in the U.S. also worry, especially post 9/11, that border security will prove impossible to manage. They hold that drugs, illegal immigration, and possibly terrorists could sneak by the border unbeknownst to the U.S. government, even though border technology has been advanced by NASCO funding. Thus the question arises, which group is right? Research conducted by Vincent Childress concludes that U.S. domestic manufacturing has suffered due to NAFTA, among other global reasons. He goes on to note that even though there were some manufacturing companies which had experienced growth, most companies have either moved their manufacturing to Mexico or have contracted with a Mexican manufacturer (Childress, 2012, pgs.23-24). U.S. trucking jobs are also at stake according to Richard Vogel (2007, pgs.25-26). There are also groups which believe that national sovereignty is at stake because the three governments are planning to create a North American Union behind closed doors. One such group is called the Coalition to Block the North American Union (Smyth, 2007). These groups are especially leery towards the SPP for their involvement and secrecy (Blank, 2008, p.236).

Both sides have convincing evidence to support their respective arguments. While a massive intermodal transportation system with modern technology does advance global competition and speeds up the process of distribution, many believe that it supports the wrong type of capitalism – that which uses countries with lower labor costs to maneuver around high U.S. labor laws to import cheap foreign goods, thereby undercutting each country’s respective domestic production. Free trade agreements conflict with individual national goals, and will only have a positive effect with complete and total harmonization of laws between the countries. This means a North American Union is the only way to create a perfect free trade agreement between the Mexico, the United States, and Canada, and thus a free trade agreement will always fail to gain complete support from the populations of the conspiring countries. Although the interstates that make up the NASCO corridor already exist and there is funding to improve them, the economic recession that hit in 2008 limits funding and virtually disables the road construction improvements needed to create the proposed corridor. In simple terms, the collaborative efforts, capital, and countenance from the citizens, legislators, and multinational corporations required for the NASCO corridor are beyond the capacity of the North American continent’s resources.

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Author

coteJoshua Cote is a student at Athens State University whose expected graduation date is in May 2015. He seeks a double major in Logistics and Supply Chain Management and History and has had a significant presence at the main campus in student activities involving the Student Government Association. He held the position of Secretary of the SGA during the 2012-2013 school year and is currently serving as the President of Phi Alpha Theta, the History Honor Society, and President of Pi Gamma Mu. He is also a member of Delta Mu Delta and was awarded the Who’s Who Among College Students Award in 2013.

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