FedEx : Modernizing NAFTA Matters

January 24, 2018

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This week negotiators from the U.S., Canada and Mexico are meeting in Montreal to update the regional North American Free Trade Agreement. While there has been considerable progress in many areas, there are some issues yet to be resolved. One area that FedEx is extremely interested in relates to the growth of the digital economy and e-commerce, and the free movement of data across borders

As the founder of FedEx, Fred Smith noted years ago, the information about a package is as important as the package itself. We couldn't run our global express network, or provide up-to-the-minute tracking without the ability to move data around the world.

Consider all of the data required to process your single e-commerce order: from the data architecture of each website to the data required to place the order, pay for it, select it from a warehouse, place it on the right plane or truck and then deliver it to the right address, and possibly return it. NAFTA gives us the opportunity to enact modern rules that protect the flow of this data across borders.

While U.S. negotiators are working to ensure the free flow of data across borders they are also working to simplify the physical movement of goods by asking Mexico and Canada to raise their de minimis levels. De minimis is the value below which a good enters a country duty free. In the U.S. goods valued below $800 enter duty free. But in Mexico the limit is about $50 and in Canada it is only about $15. That means Canadian residents are charged duty and taxes on very low priced e-commerce products from the U.S. or Mexico.

This huge disparity puts U.S. e-commerce vendors, and FedEx customers, at a significant disadvantage when compared to their Mexican and Canadian competitors. Narrowing this gap will help small businesses in the U.S. export more to Canada and Mexico. It will also help Mexican and Canadian consumers by giving them more choice and better prices. For FedEx, raising de minimis levels and simplifying the movement of low-value goods across borders is a priority in these negotiations.

Now is the time to address this disparity and create a globally competitive North American e-commerce marketplace.

Ralph Carter

Managing Director, Legal, Trade & International Affairs, FedEx Express

As Managing Director of Legal, Trade & International Affairs, Ralph Carter is responsible for FedEx policies on global trade and trade facilitation. Carter's team advocates for simpler, more open trade rules that reduce barriers and help FedEx customers expand their international business. Carter is a frequent speaker and contributor to international trade events and initiatives including at APEC, the WTO, World Bank, World Economic Forum and the Business 20 ('B20'). Carter's work has helped FedEx become a respected global leader in international trade policy. Before establishing the FedEx Legal, Trade & International Affairs office in Washington, DC, Carter was Managing Director in the legal department of the Europe, Middle East and Africa FedEx headquarters in Brussels, Belgium.

Before joining FedEx, Carter worked at the United States Department of State, serving as the Special Assistant to the United States Ambassador to the European Union. He is a former member of the State Department's Advisory Committee on International Economic Policy and was a cleared advisor and staff liaison for the President's Advisory Committee on Trade Policy & Negotiations (ACTPN).

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