Our borders are busier than ever. This year, Mexico and Canada became our top two trading partners, with trade valued at $3 billion every day.
Our roots with our largest trading partners are deep, as the North American Strategy for Competitiveness’s annual continental reunion highlighted over the summer with a ceremony at the 1846 fort in Edmonton, Alberta, Canada. The space had been used for centuries as an international trading post and gathering space.
This relationship has boomed since supply chain resiliency became more important during and after the pandemic. More and more companies are looking to move critical points of their supply chain to the Western Hemisphere. Mexico has benefited greatly, with foreign direct investment growing by 48%, and the United States and Canada are attracting investments in key sectors such as semiconductors, solar energy, and electric vehicle battery production.
Nearshoring – relocating a supply chain close to a target market – presents clear opportunities for growth, but one key challenge remains: labor. Without the right people, with the right skills, in the right place, nearshoring opportunities remain just that – opportunities. To translate them into success, the United States, Canada, and Mexico will need to work together to address their labor shortages and mismatches.
An early presentation at the NASCO continental reunion illustrated the key role labor and workforce development play in taking advantage of nearshoring opportunities.
One example of companies recognizing the opportunities of working across North America is CPKS Railway. At the conference, CPKC Senior Vice President Coby Bullard discussed the historic merger of Canada Pacific and the Kansas City Southern Railway into the only fully North American rail company. Since CPKC now owns and manages the railway in all three countries, the need for train car handoffs was eliminated. This increased efficiency translates to faster transit times, greater profitability, and allows businesses looking to nearshore to North America more options for moving their goods to market. This helps all sectors, but particularly the automotive and agriculture industries. Many other companies are expanding throughout North America or standardizing their workforce training across their North American locations.
On the labor side of the conversation, we highlighted the George W. Bush Institute-NASCO North America Workforce Initiative’s paper titled “Bolstering North America’s competitiveness via a coordinated approach to workforce development.” The study takes a deep dive into how the United States, Canada, and Mexico each carry out their workforce development priorities and the different challenges facing each country. It also looks at how the mismatch in workforce development across North America reduces our efficiency and competitiveness and leaves opportunity populations underemployed.
The United States and Canada both struggle with labor shortages, while Mexico is experiencing job shortages. All three countries have different systems for recognizing the skilled trades (jobs that require a certification but not necessarily a four-year degree), how those certifications are authorized, and how the education leading up to those certifications is carried out. The specific names and types of certifications available to the same industries are also different across all three countries.
Standardizing workforce development could lead to higher employment rates for opportunity populations, better opportunities for reskilling (employees acquiring skills to transition to new industries, particularly when original jobs are lost due to changes in technology), lower training costs, and a more mobile labor force. Many companies operating across North America already standardize their labor training and internal certifications – because it makes sense to do so.
The USMCA Competitiveness Committee, established under Chapter 26 of USMCA to foster North American collaboration and competitiveness, offers the United States, Canada, and Mexico a unique chance to align their national and regional workforce development goals. We were encouraged to hear about their events prioritizing workforce development and trade, and the ministers’ willingness to explore regional solutions to workforce development.
In a different panel, CyLynn Braswell, Senior Advisor in analytics at Frontline Education and Wes Jurey, Senior Advisor for the Manufacturing Skills Standards Council, outlined pilot programs from the private sector and local organizations that are already underway to work toward shared North American certifications.
Throughout the conference, I was encouraged by the throughline spirit of North American collaboration and shared goals, and the recognition that workforce development is an opportunity that can be approached from a regional perspective. A clear commitment is still needed by the three governments to pursue unified workforce development credentials and apprenticeship programs and is a necessary first step to make North American certifications a reality. Truly, a North American goal worth pursuing.