Global companies see hope in NAFTA

By JOHN B. EVERTON
Special to Essex County Newspapers

Whether selling codfish or computer parts, the North Shore has always been involved in international trade. In coming decades, as major ports like Boston and New York become even more congested, the North Shore is poised to become an even bigger player in the global marketplace.

"There hasn't been much vessel activity in Gloucester, but we are seeing an increase in North Shore land freight," says U.S. Customs inspector Brian Costello.

Costello, whose office is at Blackburn Industrial Park in Gloucester, said he spends about four hours daily clearing freight at Expediters International in Peabody. Expediters imports goods for companies such as Digital, Motorola, Reebok and Safety First.

Rising warehouse rates and South Shore traffic jams drove Expediters from Boston to Peabody in June 1997, company officials say. Since relocating on the North Shore, company officials say they have noticed better Customs service.

"Making formal entry can be a complicated and time-consuming process. So the smaller the Customs port, the better the service you're likely to get," explains Costello.

Other local manufacturers are exporting goods ranging from computer parts and machinery to leather goods and telecommunications products. But, despite increased international trade, the North Shore has lost some manufacturing jobs to countries such as Mexico and Canada.

For example, Osram Sylvania, with manufacturing facilities in Danvers and throughout the world, laid off about 150 people in 1998. These layoffs are seen as a consequence of NAFTA, the 1994 North American Trade Agreement, designed, proponents say, to increase U.S. trade by lowering trade barriers between the United States and Canada and Mexico.

Promising to create 200,000 new U.S. jobs, NAFTA has led to some layoffs at U.S. companies. "Generally, more and more manufacturing jobs are moving to Mexico because the cost of doing business is cheaper," explains Bill Langford, president of Osram Sylvania.

"In the lighting industry, for example, Phillips closed their Little Rock plant and moved to Mexico. We also have customers like GM, Nissan and BMW, who are moving assembly plants there," Langford says.

"We supply them not only with light bulbs, but with composite head and tail lamps. If we want to serve them, we only have two choices: We can build with them or lose them," explains Langford, noting that the bulk of Sylvania's U.S. products are still manufactured in St. Mary's, Pa.

Although the North Shore might continue to lose manufacturing jobs to Mexico and other countries, the area still has what it takes to achieve economic growth.

"I think the North Shore is doing well. There's a sense of excitement here, and there's a wealth of talent in some disciplines including science, engineering, marketing and sales," says Langford. "Talent like this enables us to make much of the equipment we need for our manufacturing facilities in Cherry Hill and Danvers, and our central sales and marketing personnel are also located here."

Plastics manufacturer Bixby International Corp., which employs about 75 people, has been on the North Shore since 1874. Founded in Haverhill, the company moved to Newburyport in 1970, the same year owner Benjamin Bixby took the helm.

The company also has manufacturing operations in Mexico and warehouses in places like Singapore. In Bixby's opinion, NAFTA will create greater opportunities for North Shore businesses in the near future.

"Long term, I think NAFTA will give us more opportunity to compete," Bixby said. "Right now, trade duties and transportation still make it costly to move product to places like Mexico. But, in about six years, these duties will disappear."

Bixby's company originally produced footwear components. But diversification became both healthy and necessary, Bixby says, and today the company sells plastics for a number of medical, environmental and industrial uses.

Trade agreements can create new opportunities in international trade, says Gloucester businesswoman Sue Welch, citing NAFTA and the General Agreement on Tariffs and Trade, first signed in 1947 by a handful of countries and now recognized by more than 100 industrialized and developing nations under the World Trade Organization.

But, Welch says, such treaties also can present managers with a host of new problems.

"When the rules change, the playing field changes. Sometimes barriers to trade exist, but people don't know about them, and getting information from individual governments is often difficult," explains Welch, whose company, RockPort Trade Systems, sells software designed to make international trade easier.

"Knowing certain industries are subject to punitive fines and penalties for exceeding duty quotas on some goods scares people. This kind of atmosphere discourages people from getting involved in international trade," Welch adds

For some companies, however, going global can be as easy as going online. "I recently read about an English cookie company," Langford says. "Their business doubled just by going on the Internet. I think anybody who has a great product is capable of going international."

For businesses that rely on a lot of suppliers, however, the type of software tracking systems that Welch provides are essential. "We think doing business across international borders should be as easy as doing business across the street," Welch says. "And our products help do that."

Langford agrees. "Having a global source and supply software system makes you better," he says. "Working with one requires a lot of discipline, but you've got to be able to do it or you will go out of business."