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Two Key Investments in North American Competitiveness
The George W. Bush Institute proposes two long-term investments in areas that form the backbone of North America’s future competitiveness. Each is critical to drive regional growth and each offers a high return on the investment.
In-DepthBush Institute Recommendations
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The North American continent has become more integrated, more efficient, more productive, and more competitive over the past 25 years.
Our unique form of incremental and tailored economic integration among Canada, Mexico, and the United States has brought clear benefits to all three countries. Removing barriers to trade and investment throughout North America has enabled our businesses to create truly regional–and more productive–supply chains and manufacturing platforms. According to the 2016 George W. Bush Institute’s North America Competitiveness Scorecard, North America continues to be the world’s most competitive economic region.
While economic growth in the United States needs to be stronger to increase the prosperity of our citizens, we know that trade, particularly with Canada and Mexico, benefits all of us. Trade increases the number and variety of lower priced goods available for middle class consumers. Workers in trade-intensive industries are paid 18 percent more than comparable workers. And the jobs of 2.8 million Americans are dependent upon our trade relationship with our North American neighbors.
The jobs of 2.8 million Americans are dependent upon our trade relationship with our North American neighbors.
Our advantage lies in the compatibility of our three nations’ economic strengths, our collective ingenuity in leading sectors, and in our competitive workforces. These assets have enabled North America to weather a slowdown in global trade, while major emerging markets and Europe experience serious challenges. If we are to maintain our global lead, though, we need a strategic plan and renewed efforts to work together, from the leadership level to community collaboration.
The George W. Bush Institute proposes two long-term investments in areas that form the backbone of North America’s future competitiveness. Both are critical to driving regional growth and both offer a high return on the investment:
- Enable a market-driven approach to planning and financing border infrastructure to strengthen productivity and global competitiveness of our region.
- Build the most proficient technical workforce pipeline in the world by expanding the availability and common use of best-in-class standards, training, and credentials for frontline jobs in North America.
Establish a new North American Border Infrastructure Bank to drive a market approach to planning, financing, and coordinating border projects
- Synthesize the best thinking in North America on infrastructure needs into an institution—a bank—whose impartial, data-driven knowledge products would be accessible and disseminated to public and private stakeholders in all three countries.
- Capitalize the bank to deploy innovative lending instruments and help minimize the risk in border infrastructure projects, many of which never enter the planning phase due to the prohibitively high cost to local communities of conducting feasibility studies and meeting all pertinent regulatory requirements.
- Empower the bank to assume a neutral and non-regulatory coordination role for transnational projects to reduce the time and resource burden, on national and sub-national entities, of convening stakeholders to execute complex border projects.
On the average day, approximately $2.4 billion worth—2 million tons—of goods move between the United States, Canada, and Mexico. That is the equivalent of more than 4 percent of U.S. GDP moving across North American borders every day. However, the U.S. economy alone loses nearly $8 billion in output every year due to inadequate border crossing infrastructure, insufficient staffing, or inefficient security and customs procedures.
Constraints on federal spending in all three countries mean that state or provincial and local governments must use their budgets, raise public funds, seek alternative funding sources, or postpone projects. A North American border infrastructure bank can overcome funding constraints by creating coalitions among border regions and engaging private capital to build agile and sustainable systems for moving goods faster, cheaper, and more securely across the North American manufacturing platform.
Working closely with government and industry, a North American infrastructure bank would be well positioned to generate an “end-to-end” border perspective, enabling prioritization of projects according to objective market data, not political criteria. A North American border infrastructure bank would also play a critical role facilitating coordination among agencies and entities building border projects, helping projects come in on time and at cost.
Expand access to common technical credentials for frontline work in manufacturing and logistics
- Advance the use of common standards and stackable credentials for frontline work in North American manufacturing and logistics so they are recognized across industries, enabling workers to seek higher-paying job opportunities and maximize their potential.
- Enhance the integrity and productivity of the supply chain by establishing recognizable training criteria so employers know what skill level an applicant brings to the job.
- Inspire the use of common standards and credentials by improving the “brand” of technical career education, training, and certification and quantifying the benefits to new workers and employers.
- Expand the delivery system for credentials throughout North America by strengthening regional ties among career technical training and certification bodies, sharing best practices, and leveraging our respective assets.
Advanced manufacturing and modern logistics careers are being fueled by North American trade. By focusing on better preparing youth for employment in growing sectors of the economy, we can address long-term labor market shortfalls in North America, improve lifetime earning potential for workers in all three countries, and contribute significantly to national and regional productivity.
The greatest opportunity for North America is in the sectors that have formed regional manufacturing and service clusters in advanced manufacturing and logistics—sectors that are generating demand for skilled frontline workers in all three countries but lack candidates with sufficient skills to fill them. Certifications for these skills are applicable to over 70 percent of the jobs in manufacturing and logistics and can be delivered effectively through low-cost, flexible certificate and technical training programs.
Where we gain advantage is by ensuring the foundation and quality of the training programs is consistently high, more widely available, and adopted by more companies engaging in North American trade. Working with key certifying bodies in the U.S., Canada, and Mexico, we can identify complementary assets, agree on pathways toward mutual recognition, and inspire young workers to pursue frontline positions in advancing manufacturing and logistics.
Some five million U.S. jobs are left unfilled because of a mismatch between the skills workers possess and those employers need.
3October 13, 2016
Simplifying Border Crossings for Goods Will Help the Economy
The macroeconomic benefits of this could be significant. Our initial estimates suggest that these small changes in how we plan and fund cross-border infrastructure could increase U.S. GDP by one percentage point, about $220 billion...Top Story