Twenty-six years ago this month at the Shamrock Summit in Quebec City, Prime Minister Brian Mulroney and President Ronald Reagan pledged “to give the highest priority to finding mutually acceptable means to reduce and eliminate existing barriers to trade and facilitate trade and investment flows.” This led ultimately to the free trade negotiations and later to the North American Free Trade Agreement (NAFTA). Whether last month’s “Beyond the Border” declaration by Prime Minister Stephen Harper and President Barack Obama will have a comparable result remains to be seen. The devil will be in the details, but it is refreshingly bilateral in scope. Provided the result is a healthy balance between measures to deal with legitimate security concerns and improvements in access for movements of people, goods and services across our shared border, it will be welcome indeed — the first bold bilateral initiative affecting our most vital relationship in more than 20 years.
For too long, security has trumped trade to the detriment of both economies. For too long, as well, political capital as well as attention to major bilateral concerns has been squandered on will-of-the-wisp trilateral approaches to the Security and Prosperity Partnership (SPP), which was lofty in principle but meagre in terms of results. As Geoffrey Hale of the University of Lethbridge observed, “The SPP died of analysis paralysis, administrative overload and the absence of political will.”
Not surprisingly, since 9/11, America’s priority has been about the potential for security lapses at the border. Part mythical, but in some ways genuine, these concerns have contributed to a counterproductive thickening of border procedures, causing hassle and costly delays at the border and undermining much of the efficiency, hence the competitiveness, of our highly integrated economies. Despite salutary attempts initially to invigorate a “smart border,” layers of new inspections and requirements restricting access have been introduced, making the border dumber in practice, a barrier instead of a bridge.
Negotiations aimed at reversing this trend — establishing joint border facilities, an integrated cargo strategy and enhanced customs procedures, the expanded use of “trusted shipper” and “trusted traveller” procedures — to facilitate the integrated nature of so much of what we produce together would benefit both economies significantly. At a time of uncertain economic recovery, the best catalyst for job growth and prosperity would be a more open border, consistent with the fundamental principles of the Free Trade Agreement. President Obama is calling for a doubling of US exports in five years in an effort to kick-start economic recovery. Canada is still the number one US export market. Not only do we trade with one another, we also make things together. That is why measures that would facilitate more efficient manufacturing on both sides of the border would be a prime catalyst for achieving the President’s goal. A new bridge connecting Detroit and Windsor, pushed by the two leaders, would be an excellent first step.
Similarly, since geography ensures that Canada will always occupy a unique position in US security considerations, it is a matter of common sense that we work with the Americans to make our border more secure. New technologies can be deployed to ensure higher levels of security, including measures to cope with 21st-century threats from cyberspace. There is obvious merit, too, in extending and sharing relevant law enforcement information to help identify and apprehend known and suspected terrorists and violent criminals.
Also to be commended is the move to establish the Regulatory Cooperation Council — aimed at streamlining much of the regulatory sludge on both sides of the border. President Obama already signalled his intention to move unilaterally in this direction. It would be prudent for Canada to follow suit. A series of sensible studies in Canada have pointed in the same direction, but they have gathered more dust than traction over the years. The auto sector alone has more than 20 different regulatory requirements for vehicles manufactured by the same companies. What would be the downside of reforms that would improve, rather than retard, the efficiency and competitiveness of this shared industry, much of which is just emerging from bankruptcy?
Not only do we trade with one another, we also make things together. That is why measures that would facilitate more efficient manufacturing on both sides of the border would be a prime catalyst for achieving the President’s goal. A new bridge connecting Detroit and Windsor, pushed by the two leaders, would be an excellent first step.
Genuine concerns about privacy in both countries will have to be addressed, and each country has precise laws to that effect. But, before anything has even been negotiated, there are all too predictable outcries, primarily from pseudo-nationalists, about a potential loss of sovereignty. This “little Canadian” reflex masks a combination of motives and fears that are rarely amenable to rational debate. Agreements that enhance mutual interests are actually assertions of sovereignty, and consistent with a long tradition of constructive agreements between Canada and the United States that serve and improve vital security, economic and environmental interests. If anything, new and precise rules of engagement are very much in the interest of the smaller partner in preserving as well as nurturing genuine manifestations of sovereignty.
To best manage both the attitudinal and the practical aspects, the Prime Minister and the President will need to be closely involved, directing and articulating what is being negotiated to ensure that the over-arching goal of a balanced agreement is met. A big risk from the inside is that the objectives proclaimed from the top will be sandbagged in the trenches by “iron rice bowl” mentalities of officials more anxious to retain control than to forge higher levels of cooperation. Translating the vision of communiqués into concrete agreements will not be easy. Much hard slogging lies ahead. There is no guarantee of success, but both leaders will need to galvanize and prod their respective bureaucracies to override inertia and deliver tangible results. There is no shortage of sound ideas on what needs to be done. The technology needed to administer the border more securely and more efficiently has improved exponentially over the past decade. If there is sustained political will, and if those with a direct stake in the outcome are consulted closely, practical solutions can be concluded. But persistent political oversight will be as essential as it was in the free trade and acid rain negotiations.
When economic prospects are less than robust, the siren song of protectionism attracts broad political support, notably in the US Congress. Given that the US market drives more than 30 percent of Canada’s GDP, this means that we must be constantly vigilant to safeguard access to our largest market. A new border agreement, one that reflects a healthy and necessary balance between legitimate concerns about security and the mutual advantage of smoother entry procedures, would be a strong antidote to such pressures.
It is never easy to launch a major bilateral initiative between Canada and the United States. Indifference, no matter how benign, means that attention, let alone action, to engage with Canada is rarely high on Washington’s priority list. Meanwhile, Canadian governments, especially minority governments, tend to tread very carefully on new ideas, always sensitive to the complex attitudes Canadians have about relations with their southern neighbour. More often than not, the relationship is left running in neutral, jarred from time to time by trade spats like softwood lumber or “Buy America” restrictions.
The inner workings of government
Keep track of who’s doing what to get federal policy made. In The Functionary.
The Functionary
Our newsletter about the public service.
Nominated for a Digital Publishing Award.
Canadians can be hypersensitive, even wary, about a relationship that touches virtually every aspect of our public policy. Bold bilateral initiatives are rarely popular on the home front. Equally, the US is usually preoccupied with more pressing global priorities, and somewhat oblivious to the importance and the advantage of ties with Canada. For instance, few Americans know that Canada is a larger market for US goods than all 27 European Union member states combined. Or that our bilateral trade supports more than 7 million US jobs. Nor do many realize that Canada is the number one “foreign” supplier of all forms of energy to the US — more than 2 million barrels of oil each and every day. In the face of chronic indifference in the US and emotional sensitivities in Canada, the border initiative is, in itself, a refreshing assertion of common sense.
There is scope for even more between Canada and the US if the political will can be mustered on both sides systematically to serve broader mutual interests. Despite the comprehensive nature of our bilateral relationship, the institutional linkages between our two countries are sparse. We rely heavily on informal links and customs formed over decades of pragmatic cooperation. This may not be all that bad, but it can be tenuous when problems arise. It may well be time to consider the establishment of a new bilateral border commission, one that, consistent with parliamentary and congressional prerogatives, would be empowered to ensure equitable implementation of the new border agreement and to serve as a safety valve responding promptly to concerns of importers and exporters alike.
To date, the “Clean Energy Dialogue” has been little more than an expedient talk shop. Canada’s role as the largest supplier of all forms of energy to the US gives it a unique position from which to articulate and influence more constructive results. Given events of late in Egypt and the Middle East more generally, imports from the Canadian oil sands are certain to be more vital to the US economy than ever.
Discussions in both countries about climate change and energy security cry out for more pragmatic bilateral deliberations and enlightened cooperation. To date, the “Clean Energy Dialogue” has been little more than an expedient talk shop. Canada’s role as the largest supplier of all forms of energy to the US gives it a unique position from which to articulate and influence more constructive results. Given events of late in Egypt and the Middle East more generally, imports from the Canadian oil sands are certain to be more vital to the US economy than ever.
There is a risk, however, that this debate will be overwhelmed in both countries by narrow advocacy groups and by rhetorical salutes to trends of political correctness, rather than by serious proposals for common cause. There is an even greater risk of serious economic damage — the law of unintended consequences — if either country chooses to go its own way. There is, as well, the pernicious threat in both countries from green protectionism masquerading as climate change virtue. Trade restrictions based on “carbon density,” however defined, fall in this category. Highly subsidized schemes to promote “clean, renewable energy” or proposals to exclude large-scale hydro projects from skewed definitions of standards for electricity constitute threats to legitimate energy exports and to basic principles of international trade. They will be defused only if we find common ground for approaches that preserve our shared environment while respecting our mutual economic need for stable energy supplies.
Twenty years ago this month, and after decades of heated rancour on both sides of the border, Canada and the US concluded an accord to deal with the problem of acid rain. We should invoke the same spirit and the same determination to forge an agreement that will address the twin objectives of climate change and energy security. It is not a question of Canada waiting for the US. Rather, it is choosing to work with the US to find a sensible solution to a mutual challenge.
The Arctic is also a region that would benefit from an outbreak of common resolve. Instead of being hobbled by intractable legal disputes — which raise understandable concerns about sovereignty — we should be ready to explore measures that would respond constructively to the opportunities and the threats affecting our shared roof, from commerce and transport to security and the environment. Initiatives reflecting common objectives can be pursued without in any way compromising outstanding legal claims. Systematic dialogue among experts should be encouraged as a basis for concrete action.
Whatever priorities are selected, we should use the current border negotiations to galvanize broader consideration of bilateral endeavours consistent with our respective self-interests and our history of joint effort. To that end, Canada will need to take the lead and engage systematically and confidently with the US administration, with key congressional leaders and with leading opinion makers to ensure that our ideas, as well as our concerns, register where they matter most. The immediate political rewards at home may be elusive but, as history convincingly demonstrates, the benefits could be considerable.
Photo: Shutterstock
