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Opinion: The future of the Canada-US partnership
By Jayson Myers
When Prime Minister Stephen Harper and President Barack Obama announced their shared vision for perimeter security and economic competitiveness in February, many people immediately wrote off the exercise as another in a long line of attempts to "fix" border irritants between our countries.
This was the fifth similar effort in the past dozen years, starting with the shared border declarations in the late 1990s, the 32-point action plan in 2001, the Security and Prosperity Partnership of 2005 and the North American Competitiveness Council of 2007. To be blunt, these efforts produced some results, but didn't succeed in solving the real challenges businesses on both sides of the border face in their day-to-day operations.
The costs of bad regulatory and antiquated border policies are too significant to ignore. They cost Canada five per cent of GDP every year – that's more than $50 billion out of the pockets of consumers. Furthermore, they reduce corporate investment in employees, productive capacity, and innovation.
Why are the costs so extreme? Canadian and US manufacturers don't simply trade with each other; we build things together. Cars, food products, telecommunications equipment, steel and metal products, are just some of the goods that Canadian and Americans manufacture together and use to compete together in global markets.
That's the good news.
These component parts however cross our border multiple times before a finished product is ready for retail.
While integration has increased substantially since the signing of 1988 FTA, the regulatory system has not kept up with the business realities. Product regulations and border processes today are often rooted in an economic reality from 50 years ago. Despite integrated manufacturing, many products cannot be designed, tested and built for sale in both countries all as a result of slight differences in regulatory standards.
That's the bad news.
Over the past decade, Ottawa and Washington have demanded more information about every component of products crossing our border, a demand that is often multiple, repetitive and costly. At the same time, foreign produced goods – our competition both in this marketplace and globally – face no such hurdles. Goods are typically manufactured within a single jurisdiction where finished products are imported into Canada or the US with a single customs compliance and security process, dramatically reducing costs for production and ultimately, the price for consumers.
On February 4, the leaders set out a very ambitious, yet straightforward objective – improve "perimeter" security against third-country threats while accelerating the legitimate flow of people, goods and services between our two countries. Improvements were to be measured through real, bottom-line results for companies and less congestion at our border.
Throughout this process, and based on the feedback from our member companies, we have worked in both capitals to define what we believe is the way forward.
Agility and time are the currency of today's new normal, and businesses need regulations that allow companies to invest and grow, not whither and die.
We don't need smart regulation – we need common-sense harmonization that includes a single electronic window to report necessary information; a system where business travellers cross our border with minimum hassle and a system where border agencies put the word "trust" back into trusted trader programs.
Past efforts on our border have simply not been enough. The challenges our members face in continental North America are now greater than ever. Free trade agreements will bring even more competition for our products.
Our members can compete on product quality and reliability, but we cannot compete when archaic rules and misinformed border policies are a competitive disadvantage and stifle the successes of our integration.
It's time we manufactured our future together. It's time we move forward and bring the Canada-US partnership into the 21st century. Jobs on both sides of the 49th parallel depend on it. The clock is ticking.
Jayson Myers is the president and CEO of Canadian Manufacturers & Exporters – the country's largest industry and trade association. For more information, visit www.cme-mec.ca.
