Deal creates path
for NAFTA railway

Canadian Pacific train in British Columbia

An important acquisition announced this month by Canadian Pacific positions the railroad to be North America's first continental NAFTA super-railway, connecting Canada with Mexico through the heart of the U.S., roughly parallel to Interstate 35.

On Sept. 4, when Canadian Pacific, or CP, announced an agreement to acquire the Dakota, Minnesota & Eastern Railroad, or DM&E, railroad analysts saw the move as a strategic attempt by CP to move into Wyoming's coal rich Power River Basin. In that area, the Burlington Northern Santa Fe, BNSF, and Union Pacific, UP, previously enjoyed exclusive access.

Included in the deal was the Iowa, Chicago, and Eastern Railroad, or IC&E, a sister railroad also owned by Cedar American Rail Holdings, Inc., the parent holding company of both the DM&E and the IC&E.

Largely overlooked in the deal, IC&E – independently operated from the DM&E – reaches down into Kansas City, where the DM&E shares the KnocheYard with Kansas City Southern, or KCS.

The acquisition expanded CP's 14,000-mile rail network by approximately 2,500 miles, including, through IC&E, access into the U.S. Midwest, adding to the CP markets American markets for agricultural products, ethanol and coal.

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Perhaps even more important, through the Knoche Yard and the connection with KCS, the acquisition allows CP to reach all the way down to the Mexican ports of Manzanillo and Lazaro Cardenas on the Pacific.

On Jan. 1, 2005, KCS took control of the Texas Mexican Railway Company and the U.S. portion of the International Bridge in Laredo, Texas.

Then in April 2005, KCS purchased the controlling interests in Transportacion Ferroviaria Mexicana, or TFM, which KCS promptly renamed the Kansas City Southern de Mexico, or KCSM.

Before the acquisition, the Canadian Pacific stretched across Canada, from Vancouver on the Pacific to Montreal and south from Montreal to New York, on the Atlantic.

After the acquisition, the Canadian Pacific arguably is the first truly North American continental railroad, positioned not only for NAFTA trade but for a large market share of the millions of containers WND has documented are positioned for the North American marketplace under World Trade Organization agreements.

Now, CP and the KCS are positioned to form the first continental NAFTA railroad, given their connection through IC&E and KCS jointly operating out of the KnocheYard in Kansas City.

Cutting through Kansas City, the routes of IC&E and KCS roughly parallel Interstate 35 through the heartland of the United States from Canada to Mexico.

WND reported the KCS acquisitions in Mexico have positioned KCS as a NAFTA railroad.

In the same article, WND reported Kansas City has declared itself to be an "inland port," planning to house a Mexican customs office in the heart of the city, positioned to be a main terminal for Chinese containers coming north into the U.S. from Manzanillo and Lazaro Cardenas.

WND also documented Transport Canada's newly declared National Policy for Strategic Gateways and Trade Corridors, which identifies the ports of Vancouver and Prince Rupert in British Columbia to be Asian-Pacific gateways.

Chinese containers brought into North America through these British Columbia ports will be transported into North America through new truck and train trade corridors Canada plans to develop in "public-private partnership" deals structured with private investment capitalists, including foreign investment consortia.

One such deal is the Ontario-Quebec memorandum which WND has reported the two provinces have signed to build a private-public partnership-financed trade corridor between Toronto and Montreal.

WND also reported Mexican government websites which have announced the plan to extend the Trans-Texas Corridor south in what government officials in Mexico are calling a "Trans North America Corridor."

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