NAFTA has made a positive impact: study

A majority of Canadian manufacturers who responded to a new study say the North American Free Trade Agreement (NAFTA) has allowed them access new and larger markets, and improved their overall business performance.

The survey was conducted by Deloitte, with cooperation from the National Association of Manufacturers (NAM), The Manufacturing Institute and Canadian Manufacturers and Exporters (CME). In total, 321 executives were surveyed on their current and future competitiveness.

In addition, only one third of Canadian respondents said they think they are competitive on the global scale. More than 60 per cent of the survey’s respondents said they believe North America will be less competitive by 2012 in the area of production competitiveness.

However, they did indicate that North America will be more competitive in the areas of sales and marketing (45%), information technology (41%), customer service (37%), research and development/engineering (36%) and finance (34%) by 2012.

“In the face of recent and highly-publicized challenges here in Canada, the level of optimism about NAFTA and future competitiveness comes as both a surprise and a paradox,” said Deloitte partner Luc Martin. “A near-parity currency environment, rising energy and commodity costs, turbulence in capital markets, as well as closures of major manufacturing facilities, are creating very tough times for Canadian companies.”

The survey found that only 24 per cent of respondents plan to expand production in Canada.

“This survey demonstrates that manufacturers in North America share common challenges as well as the urgent need for us to work together to find common solutions,” said CME president Jayson Myers. “In order to be successful on the global stage and to compete and win against the rest of the world, our main priority is to strengthen the North American market even further.”

Canadian respondents said that the biggest barriers to North American competitiveness are labour costs (84%), the exchange rate (80%), raw material prices (68%), and availability of skilled labour (63%). Labour policies and lack of harmonized border regulations were seen as the next biggest challenges to our competitiveness.

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