How Canada’s Bombardier makes NAFTA work
The transportation giant uses the 20-year-old trade pact to design, build and assemble jets and railcars in Canada, the United States and Mexico
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When a Montreal startup began making snowmobiles in 1942, nobody could have guessed the company would become one of the world’s leading transportation manufacturers.
Today, Bombardier Inc. is the world’s only manufacturer of both railcars and airplanes, with annual revenue of $9.4 billion Canadian dollars. The company employs more than 76,000 employees at 79 production and engineering sites.
Much of the company’s growth occurred in the past two decades. The expansion coincides with the 1994 passage of the North American Free Trade Agreement (NAFTA), which eliminated most tariffs on trade between Canada, Mexico and the United States, and established infrastructure for telecommunications and transportation among the three countries. NAFTA also allows certain types of employees to move freely across borders, and created a more unified business climate across the countries.
The groundwork NAFTA laid made it easier for Bombardier to link development, manufacturing and sales operations across three countries. Before the trade agreement, Bombardier did some manufacturing and sales in the United States. But NAFTA provided a structure of cooperation that supported the company’s growth in neighboring countries, says Pierre Pyun, the company’s vice president of government affairs.
“We are very active in both the United States and Mexico, and we see our presence and facilities in those countries as part of a highly integrated North American platform that allows us to do business not only in the region but also globally,” Pyun says.
Read the full article on HSBC Global Connections—Canada web site.
Issued by HSBC Bank Canada
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