Assessing the impact of more cooperation on trade and security between Canada and the U.S.
On February 4th, Prime Minister Harper and President Obama ceremoniously announced their Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness in Washington. The primary objectives are facilitating the flow of legitimate people, goods and services across the Canada / U.S. border while moving the security and customs provisions away from our shared border and out to the perimeter around North America.
There are four key areas of cooperation between Canada and the United States under this initiative and they are: addressing threats early; trade facilitation, economic growth and jobs; integrated, cross-border law enforcement; and critical infrastructure and cyber security.
A fundamental concept of the shared vision is the notion of addressing all kinds of threats collectively — whether they are terrorist, from cyberspace or pandemic — before they ever reach North America.
There are numerous regulatory, border clearance, and capacity issues at border crossings that serve to inhibit the legitimate movement of goods and people across our shared border. These barriers are somewhat counterintuitive considering that in many cases our economies are otherwise so integrated that we are effectively producing goods together for our respective countries. For some vehicle assemblers in North America it is noted that various parts and components cross the border up to seven times before ultimately being incorporated into a vehicle in one country or the other.
In these times of significant public debts and deficits, the pressure exists to use all resources in a cost efficient manner and that is the concept behind the integrated cross-border law enforcement. It is built on the premise that the law enforcement programs and personnel in both countries can do a better job collectively than separately in addressing cross border crime and security threats.
Regarding critical infrastructure and cyber security, the reality is that critical infrastructure is far more than a bridge over the Detroit river — and that is not to understate the importance of that bridge — but that it also encompasses shared electricity grids, pipelines, ports, airports, and of course cyber threats via the Internet and other communications infrastructures.
Putting words into practice
Given these four lofty objectives, the challenge for both countries is how to operationalize them into initiatives that are practical, pragmatic and ultimately make a difference in improving both trade and security.
To achieve that goal, two additional undertakings were also announced by the Prime Minister and the President. These two entities are the Beyond the Borders Working Group (BBWG) and the Regulatory Cooperation Council (RCC) respectively.
Both are comprised of key public sector representatives on both sides of the border who are tasked with consulting, both internally within government departments and externally with stakeholders, to come up with key initiatives that can be implemented over the next two to three years.
Impact on automotive industry
For the automotive industry, in many ways the work of the Regulatory Cooperation Council is of greater importance than the Beyond the Borders Working Group as the automotive industry has been the ultimate case study on cross border industrial — and in many ways market — integration since the signing of the Auto Pact in 1965.
Since that time there have been, and continue to be, ongoing efforts to try and streamline and align both vehicle safety and emission standards. As a relatively small automotive market, any Canada- unique regulations or standards really only serve to add cost and complexity to the vehicle (and ultimately to the consumer).
Serious efforts to harmonize motor vehicle safety standards have been an ongoing project within the industry for the last decade such that now the vast majority of differences between Canada and the U.S. safety standards have been eliminated.
With respect to vehicle emission standards, these have been harmonized on vehicles for some time and if we move beyond the vehicle, late last year Canada and the United States moved forward with the same standard and approach to dealing with green house gas (GHG) emissions regulations for light duty vehicles for the 2012-2016 period.
Can Canada and the U.S. be secure and economically competitive? “Security trumps trade” has been the mantra from many parts of the U.S. since 9/11 but as more time has gone by politicians and business people on both sides of the border have come to realize that one needn’t come at the expense of the other. Time will tell.
