ECONOMIC DEVELOPMENT: Kansas City: The Corridor to the Future (NAFTA superhighway BS)

MANY ARE SURPRISED TO LEARN America’s next great trading port is located some 1,500 miles away from the Pacific Ocean and more than 900 miles from the Atlantic Ocean. Despite its inland address, Kansas City, Missouri, will soon be home to the first ever foreign customs inspection office on United States soil; a new Mexican Customs Clearance Facility, and thus an expanded international trade corridor between the U.S., Mexico, and Canada is poised to open next year with Kansas City as the focal hub.

Why are political and business officials eager to establish a customs facility, essentially a trade port, some 800 miles from the Mexican border? Not long after President Bill Clinton signed the North American Free Trade Agreement (NAFTA) in 1994, a number of public and private organizations forged partnerships to make use of existing transportation infrastructure in order to strengthen or establish trade corridors that crossed international lines. Chief among them are North America’s Super Corridor Coalition and its recently amalgamated partner, the North American International Trade Corridor supporters. The two projects are working to improve transportation and trade relations along what they call the North American Mid-Continent Trade Corridor—from Manitoba province in Canada, through the Central U.S., down to the states of Michoacan and Colima in Mexico—encompassing the two largest border crossings in the U.S.: Laredo, Texas, and Detroit, Michigan. Kansas City, the major intermodal hub at the heart of the corridor, disperses goods from Canada and Mexico throughout the U.S. and can serve as an alternative trade port as trade growth begins to choke coastal ports and customs facilities in Texas.

As more cities recognize the need to seize control of their own economic destinies, our trade corridor is a novel example of pro-action. According to a June 2005 U.S. Census Bureau report, the international trade deficit in goods and services has ballooned to $57 billion. As the trade deficit continues to expand and companies move their operations overseas, cities must define niche markets that give them a reason for existence in the global economy. For Kansas City, this has meant promoting ourselves as an international trade center. We are aggressively advancing our vision of the North American Mid-Continent Trade Corridor to solidify Kansas City’s role as a transportation, logistics, and distribution hub for the country.

In order to understand how Kansas City has moved to the forefront of NAFTA trade, one must first understand that the city has always identified as a center of trade. Kansas City began as a supply outpost for those headed west on the Oregon and Santa Fe Trails. After the Civil War, a Congressional act that authorized the construction of a Missouri River bridge ensured Kansas City’s future as an urban trade center for the region. With the advent of the railroad, Kansas City became a major rail hub for the trans-continental transport of goods.

Stephen Blank, an international business professor at Pace University in New York City, and managing director of the PanAmerican Partnership for Business Education, says the Kansas City area has long been a fundamental link in the country’s freight transportation system. He cites the 1995 Intermodal Freight Strategies Study which indicates that 80 million tons of freight moved to and from the region, and approximately 50 percent of all eastbound intermodal freight originating in California passed through the Kansas City area alone.

In transportation circles today, Kansas City may be best known for being located at the crossroads of three of the nation’s major interstate highways, I-29, I-35, and I-70. We are also situated along the largest navigable inland waterway, the Missouri/Mississippi River System. We are home to the second-largest rail center in the country, and our airport moves more air cargo each year than any other air center in the surrounding six-state region. The converted 1,400-acre Richards-Gebaur Air Force Base serves as an intermodal trade facility, called the International Freight Gateway. And with over 10,000 acres, the city boasts more Foreign Trade Zone space—where foreign goods can be stored before formally subjected to customs—than any other American city. Kansas City also has SubTropolis, the world’s largest underground business complex with nearly 5 million square feet of leasable space, allowing for the ample storage of a huge volume of distributable goods.

Blank says these infrastructure advantages, coupled with the city’s colorful trade history, make Kansas City the ideal location for the international corridor and proposed customs site. I would also say we are fortunate to have cooperation from both the private and public sector in this endeavor, a critical component of the city’s progress to date.

The North American Mid-Continent Trade Corridor allows Kansas City and its partners to market themselves jointly to businesses in Mexico, Canada, Asia, and other international locations seeking shorter distribution times and lower costs. Some of the major Pacific ports—Long Beach and Oakland, California, and Tacoma and Seattle, Washington—are already suffering logjams that will likely only get worse as trade volume and terrorism-related security mandates increase.

Consider the prognosis for three of the country’s four largest ports: in 2003, Los Angeles, Long Beach, and Oakland collectively handled 13.7 million twenty-foot equivalent units (TEUs—a standard measure of cargo container capacity); by 2020, the American Association of Port Authorities predicts that amount will explode to 40.8 million TEUs, largely from growing Pacific Rim trade. And the U.S. Department of Transportation predicts that by 2020, the nation’s 360 ports will handle more than double the tonnage levels collectively handled in 1996. U.S. ports currently accommodate roughly 99 percent of the country’s overseas trade by weight and 61 percent by value. If trade volume forecasts prove correct, not only will those ports have to grow even more efficient at processing cargo, but increased congestion will require—and businesses will surely be looking for—alternative distribution centers, such as the one we are designing in Kansas City.

Two trade partnerships with Mexican port cities were necessary to connect Kansas City with Pacific markets and make it a competitive alternative to West Coast trade portals. In January 2005, we forged a non-binding partnership with Mexico’s deep-water Pacific port, Manzanillo in the state of Colima, that allows for containers to be unloaded and inspected in Kansas City or Manzanillo, sealed, and then delivered directly by rail to the other city, bypassing inspection delays at the Texas-Mexican border. And an agreement signed in March with the port of Lázaro Cárdenas, in the state of Michoacán, allows goods from Asia to travel to their ships-to-rail terminal and then travel to Kansas City to be distributed throughout the U.S. A condition of the agreement allows shippers to move as many containers as they would like for a single $55,000 bond—as opposed to the previous “through bond” of $100,000 per container. Consequently, the Lázaro Cárdenas-Kansas City corridor could be considerably less expensive than the traditional trade portals of Long Beach or Los Angeles.

In order to make use of these treaties, Kansas City had to ensure appropriate physical infrastructure would be available. In April 2005, Kansas City Southern rail company (KCS) purchased a controlling interest in Transportación Ferroviaria Mexicana (TFM), bringing the “NAFTA Railway” into existence: a single 1,300-mile railroad system comprised of KCS, TFM, and The Texas Railway Company—all under common leadership—that connects the Central U.S., Central Mexico, and Mexico’s Pacific seaports.

The City of Kansas City enacted these agreements in conjunction with MexiPlex and SmartPort, Inc. The MexiPlex is our business complex, operated by the Kansas City-Mexico Business Development Office, which houses a Mexican consulate, the Hispanic Chamber of Commerce of Greater Kansas City, and international trade and tourism offices. It also serves as a nexus for Mexican and U.S. businesses and city governments to establish and strengthen relationships. SmartPort is a non-profit corporation created in 2001 to promote the Kansas City metropolitan area as America’s “Inland Port Solution.” SmartPort is helping turn Kansas City into an international trading center by increasing business for the transportation and logistics industries and by developing more efficient trade routes around the Kansas City hub for traded goods, such as agricultural commodities and retail merchandise.

Negotiations are continuing with officials from Winnipeg to solidify our ties with Canada by adding a Winnipeg/Manitoba liaison office in Kansas City. Future plans also include strategic partnerships with Montreal, Quebec, in order to connect the North American Mid-Continent Trade Corridor with the Quebec-Ontario-Midwest corridor, through which passes approximately 60 percent of shipments to destinations outside the province of Quebec.

Today, our city patiently awaits final approval from the federal Customs and Border Protection Agency for the first foreign customs facility on American soil, the Mexican Customs Clearance Facility. As officials sort through delicate issues of sovereignty and security, we anxiously anticipate the corridor’s economic benefits. “Right now there is some $400 billion in trade between Mexico and the U.S.,” said Mexican Secretary of Foreign Affairs Luis Ernesto Derbez during a recent diplomatic visit to Missouri. “But with a Mexican Customs Facility in Kansas City and the progression of a new trade corridor, I suspect that number is likely to double.”

The prospect of future labor disputes, the threats of terrorism, and ever-increasing cargo volume has forced our nation’s importers and exporters to search for new ports of call.

Kansas City’s integrated inland port is trying to establish itself as an alternative to existing facilities. But this new alternative has its critics. Some activists have condemned the project for the same reasons that international trade projects are always criticized: that any increase in trade hurts the American economy, causes job losses in the U.S., and contributes to the national deficit. Moreover, some worry that existing West Coast ports who fear losing market share will protest the Kansas City depot. Finally, there is the concern that security measures will be light and that terrorists will be able to take advantage of land-based ports by accessing the cargo as it is being loaded or moved.

I am hopeful that these criticisms will prove to be unfounded. Our objective in building a port is not to steal market share from existing West Coast facilities, but instead to promote additional growth and expansion of U.S. trade with countries abroad. Proponents of the trade corridor are enthused that unions have so far supported the project. The Teamsters, for example, see potential for additional work from a predicted economic boom for businesses both directly and indirectly affiliated with transportation logistics: drivers and operators, security, motors, and maintenance and repairs. With regard to security, new cargo tracking methods, such as geographic tracking, and other transportation security measures, such as x-ray analysis, are being implemented.

As we have learned from the past, integration in the new global economy comes from complete commercial, economic, political, and cultural integration. With our strategic position in the heart of America, and as the hub of the North American Trade Corridor, Kansas City intends to be an integral part of the global marketplace for years to come.

Roads are bad. We must not build roads.

Trade is also bad. We shouldn't trade.

I can see why you're outraged.

It's not that we shouldn't build roads. It's that we should build roads leading to nowhere in order to protect our sovereignty (and high-paying jobs).

I'm sure that the current flock of Magpies that constitutes our city government will figure many ways to insure that this won't succeed regardless of the geography and facillities.

No kidding - there a TONS of warehouses, rail spurs, distribution centers being built in that area. Same thing with Chicago and Dallas.

I'm okay with KC becoming once again a hub of trade. It certainly was in the 19th century. It's where I-35 and I-70 intersect for crying out loud. I just wish that Kansas would annex Kansas City MO. Or that KCMO would suceed (sp?) from MO. With all our jurisdictions under one rational right to work relatively conservative governance, this town would explode. Actually, I've always said that given five counties, two states, municipalities too numerous to count, this metro area would all be ruled by the local trash company, Deffenbaugh, if the social structure broke down.

As we have learned from the past, integration in the new global economy comes from complete commercial, economic, political, and cultural integration.

Yoo hoo, decreased transportation costs, hooray.

Uh, hold on, whats this about complete political and cultural integration? I don't recall the U.S. electorate asking for political and cultural integration with any other countries, especially of the corrupt Third World variety.

puts me in mind of Ross Perot's criticisms of some of Sheets Byrd's favorite pork-barrel projects....

"a major US Coast Guard facility, located on a mountaintop, in West Virginia, two-hundred and fifty mile from th'Ocean!"

So which member of Congress from the KC area holds a key post on the NAFTA subcommittee??

Are the Libs and the Demo Senators in MI pumping up Dem Detroit with great new port status?

13 posted on 06/15/2006 12:48:50 PM PDT by RoadTest (“Tolerance becomes a crime when applied to evil” –Thomas Mann)

I just wish that Kansas would annex Kansas City MO.

Haha, no WAY! KCMO is a WRECK! It'd be like South Korea unifying with North Korea.

I wonder why we need a complete Mexican customs office in Kansas City MI, when it is in the middle of America???

Don't they trust our own Customs people to do the job and the mexicans can just trust us.

This whole operation stinks on many levels.

I can't even get my congressman W. Delahunt, D-Mass. to admit he knows about it!!!

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