We’ve all been reading the negative and troubling headlines about a potential trade war between the United States and Canada on softwood lumber and dairy. But despite all the rhetoric, there are countless bright spots in the bilateral relationship that can and should be capitalized upon now — to the benefit of both countries.
One of the biggest areas of goodwill and co-operation will be staring us right in the face at the moment we start to ponder renegotiating the North American Free Trade Agreement (NAFTA).
In February, President Donald Trump signed an executive order entitled the Enforcing Regulatory Reform Agenda. It didn’t get a lot of media attention, but it presents a golden opportunity for Canada. The measure is aimed at streamlining federal regulations, and it directs US agencies to create task forces to identify regulations that eliminate jobs, are outdated or are too costly.
It also provides a perfect opening to accelerate and enhance a long-standing bilateral project known as the Canada/US Regulatory Cooperation Council, which is also working to streamline regulations on both sides of the border.
Bilateral regulatory co-operation may not be as enthralling as Russian spies or border walls, but it’s critical to US and Canadian businesses and their integrated supply chains. It also has an impact on Canadian and American consumers, as businesses are often forced to pass on to them the substantial costs associated with regulatory disharmony and red tape.
President Trump is eager for some wins. Canada can help provide him with one, while also advancing its own interests. The Canadian government could present the United States with a proposal for aligning a particular set of regulations. This would represent a bilateral victory for what is at the moment a US-only effort to cut regulatory red tape.
There are several sectors where regulatory disharmony causes problems.
In agri-business, energy products, medical devices, and medicine and consumer products, in particular, there is an array of conflicting regulations that make it difficult to do business, on both sides of the 49th parallel. In some cases, these regulations even prevent consumers from buying the goods they want or obtaining the medications they need if they suffer from certain illnesses or conditions.
For example, some cosmetic products are available in the US but not in Canada. Some medications that are sold over the counter in the United States are still sold by prescription only in Canada, and vice versa, which causes headaches for companies trying to market their products in both countries.
Recall mechanisms for medical devices differ in the two countries, as do regulations on a drug that helps people with Parkinsonism Syndrome — and there are many more examples.
In agri-business, meat producers in both countries deal with an antiquated headache involving the requirement that a veterinarian’s certificate be manually placed on a certain outward facing spot on every case of exported or imported meat, even though the information is more easily available using other methods. This is a costly and dubious regulation that prevents producers from fully embracing automation and high-tech shipping methods — and there are plenty of other redundant and expensive regulations.
Why shouldn’t we leverage President Trump’s interest in cutting red tape and harmonizing regulations for the benefit of the bilateral economy? This doesn’t have to wait for a NAFTA renegotiation or World Trade Organization ruling; it’s is ready to go right now.
Canadian and American officials have been working together on this since 2011, and as Gary Doer, former Canadian ambassador to the US, would say: “It’s time to put the puck in the net.”
In this period of uncertainty about President Trump’s NAFTA intentions, now is the time to work even harder on the Canada-US relationship, and to start focusing on the issues that aren’t contentious. Regulatory harmony should be a critical part of that strategy, and success there could well ease tensions elsewhere.
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