Commentary: Protectionist rules in transport cost consumers on both sides of the border

The Macdonald-Laurier Institute

The transport of goods in North America is slower and more expensive than it needs to be because of centuries-old trade practices that need to be revised, two authors argue in a Macdonald-Laurier Institute (MLI) commentary released today.

Authors Stephen Blank and Barry Prentice say that cabotage regulations create pervasive and extensive non-tariff trade barriers. Yet, while the Free Trade Agreement (FTA), the North American Free Trade Agreement (NAFTA) and the Security and Prosperity Partnership (SPP) addressed some trade-related transportation issues, cabotage regulations were left untouched.

The term cabotage refers to the requirement that the transport of goods within a country by truck, air or water transportation be carried out by a domestic carrier. Although domestic security is often cited as justification for their existence, the authors state the rules are usually instituted for political reasons – to protect domestic transport routes and the labour that runs them.

To read the media release from The Macdonald-Laurier Institute for Public Policy please click here.

To read more of the commentary, “Widening Competition in North American Freight Transport: The Impact of Cabotage” by Stephen Blank and Barry Prentice in PDF please click here.