When actor-director Ben Affleck held aloft his Oscar “Best Motion Picture” award for the movie, “Argo” and thanked Canada, most Americans applauded. But how are we really thanking Canada, by far our largest trading partner, with $1.8 billion in goods and services crosses our northern border every day? Is our economic relationship being weighted down by a tyranny of small but seemingly endless and consequential border and regulatory barriers? And, are those differences hurting capital formation and job growth in our own backyard? Are we taking the relationship for granted?
Sadly, yes. Even though Canada temporary housed scores of airplanes and American citizens grounded by the tragedy of 9-11, our trade and economic relationship with Canada has suffered ever since. Passports are now required to cross the US-Canadian border. Conveyance fees have been established for every shipment of goods from our northern neighbor. The border is thicker with new regulatory enforcement schemes and barriers.
That is why both President George Bush in 2005 and President Barack Obama in 2011 launched separate, but important initiatives to knock down those barriers and turn North America into a more powerful global export platform. President Bush launched the Security and Prosperity Partnership for North America (SPP), while President Obama followed suit with the “Beyond the Border” (BTB) and Regulatory Cooperation Council (RCC).
The SPP energized the private sector to identify hundreds of regulatory changes and cross border initiatives that could be changed, but a lack of focus and transparency; push back from government agencies that were resistant to changes; and other flaws kept the initiative from achieving its promise. Under President Obama, those flaws were confronted with well-designed action plans, complete with a clear objectives, deadlines, timelines and implementation plans, all driven by the Canadian Prime Minister’s Office and the White House.
While the “sequester” may slow some of the work, government officials are implementing their joint action plans, and some results are beginning to be seen. There’s just one concern: What happened to all the US companies that were so engaged during the early days of the SPP? The lack of engagement by the US private sector may prevent the BTB initiative, and especially the RCC from achieving its full potential.
That may result from the lack of success from the prior initiative, given the investment of time and resources by so many companies. But unlike the SPP, which organized a private sector stakeholder engagement process known as the “North American Competitiveness Council,” no such process exists under the RCC and BTB in the US, aside from a few well-attended public sessions. Too many US companies are missing out on the opportunity to bring issues and ideas to the White House, and the Canadians, to address long-standing barriers. Another factor is the lack of a more frequent communications and meetings, largely attributable to a low level of funding and staffing for the initiative. Many companies simply haven’t heard much about this powerful new initiative. It’s not too late to engage. Just this month, the President’s Export Council recommended, in a letter to the President, “enhancing stakeholder engagement to ensure that the U.S. private sector is better informed and deeply engaged on the elements of these valuable initiatives, and to help meet established deadlines.”
“Such improvements may include a more formal meeting process and increased communications between business representatives and U.S. government officials to better leverage private sector expertise to meet priorities and to ensure the programs’ success,” the PEC’s letter further stated.As former Canadian Ambassador Michael Wilson once said, “we make things together.” The US and Canada have one of the most highly integrated supply chains and markets in the world. An auto part can traverse the border up to 7 times before making into car or truck that’s in your parking space. Tomatoes from California make soup that is packaged in Toronto with cheese and other ingredients from Ontario and Quebec and shipped throughout North America. Any thickening or disruption at the border, or regulatory barrierraises the cost of these products to consumers and harms the supply chain back to the tomato farmer or processor in California. The inefficiencies they create prevent North American from being a more powerful export platform for economic growth and more jobs.
Smoothing out our economic relationship may never win an Oscar for “Best Motion Picture,” but it’s time we really thank Canada – and help ourselves – by ensuring the success of the Beyond the Border and Regulatory Cooperation Council programsthrough stronger private sector engagement. You can start by visiting this website,http://www.trade.gov/rcc/, and http://www.dhs.gov/beyond-border-action-plan/.
