The Pacific Inland Import/Export Corridor goes under a number of names, such as the "Mid-Continent Trade and Transport Corridor" when promoted by the North American SuperCorridor Coalition (NASCO). As a regional economist, a glance at the transport corridor map displayed by NASCO revealed that organized labor is a primary target.
This is not news ... indeed, it was through the blogoshphere that I learned of this Union-busting Superhighway. What this diary is concerned with is the possible coalition that can be built in opposition to this transport corridor. Therefore, it focuses in detail on all the reasons why the Pacific Inland Import/Export Corridor is very bad public policy, and then considers some constructive "rerouting" and redesign of the corridor in support of America's Energy Independence and, therefore, in support of America's Economic Independence.
Ideological Attacks Lead to Bad Designs
An effective transport corridor is a complex system. It is hard enough to design an effective transport corridor when the focus is on effective transport. When the primary basis of the design is an ideological attack on organized labor, serious flaws should not surprise anyone. In this particular case, the corridor is bad for the US economy and US energy independence. Even worse, for something that is supposed to have a "North American" emphasis, it is bad for the North American economy and energy independence
The Pacific Inland Import/Export Corridor and US Economic Independence
"Free trade" is controversial because the term can stand for two very different situations. In the first, two countries specialize in what they do best, and trade at fair terms, and both win as a result. In the second, "free trade" means freedom for corporations to plan economic relations between countries, without any need to take the needs of the citizens into account.
This is why opposite sides in the free trade debate sound like two sides arguing past each other. Supporters of free trade argue in favor of the first situation. Opponents argue against the second. And to a substantial degree, they are both right.
NAFTA is biased toward the second situation - "trade free of public responsibility". A good indicator is the fact that most of the agreement focuses on freedom to move wealth, with only about one-fifth actually focused on trade.
A close look at the Pacific Import Corridor show what type of free trade it is supporting. The "inland ports" are aligned along the super-highway. This allows container traffic brought up by truck to be passed through customs and loaded for entry into existing east-west Interstate system.
How do we know that this system is not focused on Mexican products bound for the US? There already exist multiple trucking routes from Mexico into the center of the country, with existing customs facility. If the purpose was to improve transport for trade between the US and Mexico, it would be far more efficient to improve maintenance of the existing Interstate Highway system.
What the Pacific Import/Export corridor does is provide points of entry for products passing through Mexico under bond. That is, the road corridor is for products imported from elsewhere, without any value added in Mexico at all. Mexico's sole contribution is to provide non-unionized dock workers and truck drivers. And that also explains the location of the corridor, as far from the coasts as possible to ensure that it will attract container freight.
There are rail lines provided for outside the main corridor. These bypass several of the inland ports of entry. Therefore, the primary purpose is for exports. The rail corridors terminate in Winnipeg and Windsor, which ties into the heart of the eastern and western Canadian rail networks. It is reasonably clear that the purpose is to transport primary products, like coal, iron ore and timber, needed by China and Southeast Asia.
The economic strategy implied by this Pacific Import/Export Corridor? North America is hewer of wood and drawer of water, and imports manufactured goods from elsewhere.
The Pacific Inland Import/Export Corridor and US Energy Independence
The core of the proposal is to build a freight express corridor, to bring freight from the Mexican Pacific ports to "inland ports" at:
* San Antonio (Interstate 10);
* "Alliance" Texas (Interstates 35, 20, and 30);
* Kansas City (Interstate 70); and
* Winnipeg (Canadian Highway 1).
The US relies on imported energy for 27% of its energy needs, and the present high crude oil prices seem more likely to rise than to fall over the next decade. The most energy efficient way to move containers long distances overland to a limited number of "inland ports" is rail. Trucks, of course, are far more flexible for shorter distances and for more broadly dispersed destinations.
This means that the best combination of energy efficiency and flexibility is mixed-mode transport, with containerized freight moving from ship to rail to truck.
The question must be asked: why a Super-Highway as the freight express corridor? And the answers seem reasonably clear. Trucking Asian goods in from Mexico allows the "big box" retailers such as Wal-Mart to establish wholesale and distribution centers in Mexico. Loads for individual stores may be loaded into trucks bound for individual stores. At the same time, the number of trucks that would be operating out of the collection points in Mexico ensures that the Mexican trucking firms will fight against unionization of truck drivers with all means at their disposal. Mexican railway workers, with the higher skill requirement combined with history of stronger unions, are a less attractive prospect.
A Positive Step Forward: The Inland Rail Expressway
Supporters of the Pacific Inland Import/Export Corridor hold many advantages. Indeed, several components of the Pacific Inland Import/Export Corridor have already been put into place. Opposition alone will at best blunt this attack. However, even when it is too late to reverse course, it may still be possible to steer future development in a better direction.
In this task, opponents hold one substantial advantage: the corridor plan being promoted is a very bad design. It is a money-wasting exercise in energy inefficiency focused on selling primary products to East Asia in return for manufactured goods. This is completely over and above its primary role as a direct attack on organized labor.
Since it is a bad design and will cost far more than can be justified, it is relatively straightforward to offer an improved design - and in a single stroke remove the heart of the anti-union strategy:
* Entirely eliminate the road component from the design - in other words, support the ban on new highway construction, and spend the Highway Trust Fund on repairing, maintaining and improving the existing Interstate Highways;
* Re-route the Southern Terminus of the system to Mexico City; and
* Redesign the rail infrastructure for intra-NAFTA trade and travel.
This alternative design is what I refer to as the NAFTA Rail Expressway. Heading to the center of Mexico instead of to the Pacific Ports, it is focused on constructive engagement with Mexico.