I guess generally our association is in favour of the free movement of goods across borders. If we're looking at safeguard measures, we have to be very careful how we use those measures. Increasingly what we need to do in North America is develop a North American strategy when it comes to addressing competition that comes from China and other countries in Asia.
As I mentioned, the trade between Canada and the United States, and to a lesser extent with Mexico, is becoming increasingly integrated. Thirty-four percent of trade between Canada and the United States is inter-company trade. An oft-cited example is the auto sector, where a motor vehicle may essentially go back and forth across the border eight times before you have a finished product, with parts and components going back and forth across the border. Addressing issues related to the border is absolutely critical to the competitiveness of Canadian companies and companies generally in North America.
Also, I think we have to be strategic in our investment decisions within North America. When I spent the time in Mexico.... I'll give an example of a Canadian company. What they found when producing in Canada was that there were certain lines of product that were no longer economically viable for them to produce in Canada; they were no longer cost-competitive. But their customers were demanding a full line of products, so in order to be able to satisfy their customers, they needed to maintain their full product line, including those products that were no longer feasible, from a cost perspective, to produce in Canada.
What they did was build a plant in Mexico to produce those products, at a lower cost in the Mexican market, so that they could continue to supply the full range of products to their customers. It also gave them the added advantage of being close to the southern U.S. market, which they weren't accessing from Canada, or not as effectively from Canada.
So there are certainly opportunities. We have to take advantage of our geographic proximity within North America to meet the competition that's coming from offshore. That means we have to invest in our infrastructure, we have to focus on our borders, and so on, and work very cooperatively with our trading partners within NAFTA.