On Aug. 16, talks began among partners in the North American Free Trade Agreement (NAFTA) about a possible renegotiated pact. The good news from a U.S. point of view is that the Trump administration recently reversed course and instead of seeking tariff hikes and new trade barriers in a revised agreement, now is pursuing objectives that emphasize e-commerce, telecommunications, intellectual property, labor laws, dispute resolution mechanisms and custom process automation.
That’s much more promising for the Class Is that move freight into, out of and within Mexico. The heads of those large railroads — Union Pacific, Kansas City Southern, BNSF, Ferromex and Ferrorur — grew anxious earlier this year that a renegotiated NAFTA would greatly impede cross-border traffic. Since the agreement was implemented in 1994, trade between the United States and Mexico has nearly quadrupled while their agricultural trade has quintupled.
So, how is cross-border traffic faring now for those Class Is in light of recent developments? And what are the prospects for growing freight traffic between the United States and Mexico in the near term? I try to answer those questions in the cover story I crafted for our August issue.
If you have any thoughts or concerns about NAFTA renegotiations and the implications for Class Is, please share them in the comment section.