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Robert Puentes

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A Transformative Investment for Metro Detroit and for the US

Posted: 06/25/2012 1:40 pm

Last week's announcement of a plan to build a new bridge between Detroit and Windsor was welcome news. The New International Trade Crossing (NITC) project is not only a down payment on metropolitan Detroit's future; it is also emblematic of the kind of strategic infrastructure investment we should be making around the country to invigorate our national economy.

Now, talking about freight, moving goods from Point A to Point B is not the kind of discussion that is likely to stir the blood in most people. But it is part of the economic lifeblood of major metros like Detroit. Aging infrastructure acts like cholesterol in our economy's arteries, and we need to clean that out if we're going to be competitive in the modern global marketplace.

We must have a robust air, rail, water, and roadway system, and strengthening that system is a prime mover for transformative investments that boost economies in the short and long run. Dredging the port in Miami, untangling rail lines in Chicago, expanding airports Memphis and Louisville, and building a new bridge in Michigan are examples of these kinds of investments. They are valuable as job creators and, more importantly, as integral and specific elements to accelerating growth in metropolitan economies.

To grow jobs in the short term and build a solid economy for the long term, metropolitan areas like Detroit need to build on their strengths. This is where the NITC can help.

One of the region's economic strengths is in the trade, transportation, and logistics sector. Of course, automotive manufacturing is synonymous with Detroit, but our analysis of Moody's data shows that 10 percent of metropolitan Detroit's GDP comes from using vehicles for the movement and delivery of people and cargo.

Michigan alone exports more goods Canada than to all other foreign countries combined. The highway portion of the Detroit-Windsor border handles 17 percent of total U.S. trade with Canada and 30 percent of the trade that moves by truck.

It's a crucial corridor. But since there are relatively few border crossings, traffic builds up at bridges and through tunnels. In the wake of 9/11, enhanced security operations increased wait times at some crossings even while traffic levels dropped. Crossings such as the Detroit-Windsor Tunnel also force freight to compete with passenger cars and Canadians hopping across the border for, of all things, cheaper American gas.

This is a problem; because freight supply chains have grown more complex and very sensitive to transportation-related disruptions as companies have shifted from standard warehousing of goods to sending smaller, more frequent shipments. Worse case for Michigan is that delays, disruptions, and uncertainties could force shippers to look elsewhere for their operations, like Chicago or Buffalo.

Many U.S. metros recognize the impacts that shifts in global goods movement can have on their economies. Look at how metros in the southeastern U.S. are racing to put together investment plans and expanding their ports to accommodate the supersized ships soon to be sailing through the expanded Panama Canal.

But unlike the myriad seaport projects in the southeastern U.S., the NITC enjoys support and is recognized as a strategic investment by the highest levels of government on both sides of the river. Indeed, Canada's national policy for trade recognizes the corridor as essential to their national economy. Which is, no doubt, why they're committed to paying for so much of it.

For a project with such a clear benefit to the state, Michigan is -- amazingly -- not on the hook for any of the costs. Through the intergovernmental agreement with Canada, a private concessionaire will be responsible for everything that goes in to building, operating, and maintaining the $1 billion bridge part. The customs plaza on the American side will be paid for by the national governments of both countries. Canada alone will take care of the plaza on their side, plus the connection to I-75 in Detroit.

With a solid economic case, financial plan, and international agreements at the highest level, it would be a disgrace to allow this opportunity to provide a substantial economic boost to the region -- and, by extension, the nation, be lost.

 
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