UPS Executive Calls For Reduced Trade Barriers
October 15 2009 - 2:47PM
Dow Jones News
A top United Parcel Service Inc. (UPS) executive called for
lower global trade barriers during a speech in Colombia Thursday,
saying nations that reject protectionism will flourish over those
that don't.
Bob Lekites, president of UPS Airlines, also said reduced trade
barriers hold the key to a global economic recovery. He made his
comments during a keynote address at the Latin American and
Caribbean Air Transport Association's Airline Leaders Forum in
Cartagena, Colombia.
"There is no doubt in my mind that the path to economic
prosperity extends over global trade routes," Lekites said, citing
the "unique perch" of a player in the air-cargo sector.
He bolstered the view with a number of statistics, including a
World Trade Organization estimate that cutting trade barriers by a
third would add $613 billion to the global economy.
Lekites pointed to Colombia as an example, saying free-market
reforms have helped spur 3 million new jobs since 2002. But he
warned as well that "a handful of leaders" in Latin America and the
Caribbean "are trying to threaten the viability of free trade and
the economic stability of the region," although he didn't
elaborate.
Overall, he said more must be done worldwide to reduce
free-trade restrictions, clear up customs "choke points" and
improve infrastructure to help speed the movement of goods. He also
said trade shouldn't be a political issue.
"A shipment that takes 15 minutes to clear customs in Taiwan can
take hours or even days to clear customs in some Latin American and
Caribbean countries," Lekites said.
He said the issue is partly related to outdated customs systems
in some countries but also to misguided practices. He cited Mexico
as an example, saying packages valued at over $50 - meaning most
packages - must be opened and inspected.
"Borders should not function as walls," he said. "Streamlining
and automating customs is a big step toward free-flowing global
trade."
Lekites also called for more investment by the U.S. and other
governments in transportation infrastructure, saying "inadequate
highways, poor rail capacity and congested ocean ports are really
putting a strain on global supply chains."
He cited an internal UPS study that as little as a five-minute
delay for all of the company's U.S. trucks due to congestion would
cost about $100 million annually.
-By Bob Sechler; Dow Jones Newswires; 512-394-0285;
bob.sechler@dowjones.com