Union Pacific CEO: NAFTA withdrawal impact would be ‘disastrous’

By Nick Carey

DETROIT (Reuters) – American businesses, jobs and consumers would suffer if the United States pulls out of NAFTA instead of reaching an enhanced trade treaty, railroad Union Pacific Corp’s (N:) top executive said on Thursday.

“I think that the impact of the U.S. pulling out of NAFTA would be disastrous,” Chief Executive Officer Lance Fritz told Reuters. “The conversation we need to be having is how do we enhance the NAFTA trading bloc’s capability of competing globally and specifically America’s ability to compete globally.

“We are in a death match for jobs and growth against lots and lots of competitors around the globe, and we are positioned to win,” he added.

Last week, trade officials from the United States, Canada and Mexico wrapped up a contentious round of talks on the North American Free Trade Agreement dominated by aggressive U.S. demands. [nL2N1MS0XB]

U.S. President Donald Trump, who made trade a centerpiece of his 2016 presidential campaign, has repeatedly threatened to terminate NAFTA if Mexico and Canada reject major changes.

Union Pacific is the No. 1 U.S. railroad and serves all the main U.S.-Mexico rail gateways. Fritz spoke to Reuters after the Omaha, Nebraska-based company posted a better-than-expected third-quarter profit. [nL4N1N14X6]

Fritz said the combined natural resources of the three NAFTA member countries, respect for the rule of law and similar worldview should be built upon to make a modernized trade pact.

“To me it’s just unthinkable where instead of talking about how do you leverage that and make us better, we’re talking about how can we serve a parochial interest and minimize the harm,” Fritz said.

He said whenever he speaks to anyone in the Trump administration involved in NAFTA talks, or “any elected official” he talks “about NAFTA and how critically important it is to the United States, to our jobs and citizens as consumers, and to our business community.”

Fritz also said Union Pacific is a “champion” of U.S. tax reform.

“What we really care about is the growth impact that a sensible corporate tax structure would have on the United States,” he said. “That is very meaningful to us as a company as we compete for shipping that business.”

Union Pacific’s CEO said the railroad would like to see corporate tax rates decline, but wants meaningful, long-term reform instead of a quick fix.

“Don’t make it something that can expire in five years or 10 years,” he said.

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