By Jack Kohane
United States President Franklin Roosevelt once described two-way trade between Canada and the United States as “good neighborship” and explained that “the wellbeing of one nation depends in large measure upon the wellbeing of its neighbors.”
It’s not always been a smooth road on our shared trade fronts, but recent joint initiatives to strengthen the wellbeing of both our nations’ bilateral commerce were in the spotlight at the 81st annual Canadian Association of Importers and Exporters (I.E.Canada) Conference in Toronto.
Noting the 2012 theme of this leading event for shipping professionals, “Surround Yourself with Excellence,” keynote speaker, the Hon. Ed Fast, Canada’s Minister of International Trade and Minister for the Asia-Pacific Gateway, spoke to a hall packed with the big wheels of shipping and logistics about how his government is paving the way to surround the trade sector with business opportunities. To start, he cited the 25-year-old Canada-U.S. free-trade agreement. Deals like this, “mostly shield us from U.S. protectionism, but they must be constantly reinforced,” he said. “The fractious nature of the American system means an ongoing campaign on behalf of Canadian interests.”
The trading relationship between Canada and the US has become so strong that, according to Fast, approximately $1.4 million in goods and services are exchanged every minute, more than $1.8 billion per day, and totaling about $710 billion last year.
“To put this into perspective, our bilateral trade with the U.S. is ten times what it is with China, our next-largest trading partner,” he stated, adding that the Canada-U.S. Free Trade Agreement and the NAFTA Agreement that superseded it have seen our trade with the U.S. triple and our trade with our other partner, Mexico, increase more than six-fold. “But this is just the foundation upon which we are building even greater prosperity for Canadians,” he asserted. “For starters, in just six years, our government has concluded foreign investment promotion and protection agreements with 15 countries, including China, and we’re in active negotiations with 11 others. And that is why we are working with our American friends through the Border Vision initiatives to ever improve the flow of trade and traffic across our border by removing unnecessary barriers, regulations and other red-tape.”
During the past few years, Canada has been actively expanding its commercial relations with the Asia-Pacific Region, where economic growth rates are two to three times higher than the global average. Canada has been has been invited to the negotiating table for the Trans-Pacific Partnership (TPP), with the next round to take place in New Zealand this December. This was considered a major coup, Fast told conference attendees. The TPP, whose market represents close to 660 million people and a combined GDP of over 20 trillion dollars, is a trade agreement negotiation among 11 countries, including Australia, Malaysia, Mexico, Singapore, and the U.S. “Simply put, joining the TPP is great news for the many Canadian exporters looking to Asia for greater success and opportunity,” Fast declared effusively.
Beyond Asia-Pacific, trade with the European Union is also set to expand via the Comprehensive Economic and Trade Agreement, or CETA, touted as being broader and deeper in scope than the historic NAFTA. Noted Fast, “In globally challenging times, CETA will send a strong signal to the rest of the world that Canada and the EU reject economic protectionism, and that we are committed to freer and more open trade.”
With a GDP of more than $17 trillion, and home to 500 million consumers the integrated economy of the EU is the largest economic bloc in the world. Last year, two-way trade in goods and services between Canada and the EU topped $70 billion – a 12-per-cent increase over the year before. CETA is expected to a 20 per cent increase in bilateral trade between Canada and the EU, claims Fast, and a $12 billion boost to Canada’s economy.
Responding to questions about the Asia-Pacific Gateway and Corridor Initiative, in which the federal government has invested in infrastructure projects valued at over $3.3 billion, with federal investments of $1.4 billion, in partnership with all four western provinces, municipalities and the private sector, Minister Fast stated in an exclusive interview with Canadian Sailings that his government is “Ensuring that all funds made available under the Initiative continue to support investments that create jobs and economic growth … and ease the movement of goods, services and people to and from the fast-growing Asia-Pacific economies infrastructure. The Initiative aims to make Canada’s Asia-Pacific Gateway the best transportation network for trade between North America and Asia.”
This year’s I.E.Canada Conference focused on core issues surrounding rapidly changing global trade conditions and ever-increasing regulatory burdens.
Many trade specialists attending the event spoke of the constant challenge they face of keeping one eye on changing customs regulations and trade controls and the other on keeping up-to-date on the latest developments at the policy level.
One of their biggest headaches articulated most often, is ever-increasing congestion and frequently protracted cargo inspections. Delegates to the Conference heard from Pierre Sabourin, Vice-President of Operations at Canada Border Services Agency (CBSA), about what’s being done to alleviate those bottlenecks. “In our world every traveller matters, every truck matters, every shipment is important,” he insisted. “Volumes (of freight) are increasing, cross-border business is on the upside, but we must find a balance between the free flow of trade and security matters.” To promote mobility between the two countries, a number of initiatives to streamline and expedite the complex Canada-United States entry-exit system have been introduced.
Sabourin zeroed in on the new Canada-US “Beyond the Border Action Plan,” a shared perimeter vision that’s part of the Integrated Cargo Security Strategy between our two nations. “The sharing of entry and exit information will facilitate the legitimate flow of traffic between the U.S. and Canada while strengthening border security,” he affirmed.
Risk management is the guiding principle behind Beyond the Border initiative. The Action Plan consists of 32 separate initiatives designed to enhance economic competitiveness, create jobs and support economic growth. It calls for enhancements to programs that help trusted businesses and travelers move efficiently across the border; introduces new measures to facilitate movement and trade across the border while reducing the administrative burden for business; and invests in improvements to our shared border infrastructure and echnology.
Acknowledging the “new normal” at our borders remains a work in progress, Allen Gina, Assistant Commissioner, Office of International Trade for the U.S. Department of Homeland Security in Washington, DC, told attendees. “Perimeter security will be a reality within a few years, achieved through technology advancements, and the use of large-scale imaging and radiation devices” (to scan containers), he promised.
Gina went on to explain that to reach common goals in border security management, his mandate aims to make the land border as efficient as possible. “This will be done by conducting harmonized and mutually recognized screening of shipments arriving from offshore, at the perimeter,” he explained, emphasizing that under the Action Plan shipments will be screened at the first point of entry, and not re-screened again when they cross the Canada-U.S. land border. “Land border inspections will focus on high and unknown risk travellers and shipments, and not on known low-risk travellers and shipments,“ he said, and noted that membership in programs for trusted traders and travellers – such as NEXUS and FAST – will be expanded and their benefits increased.
“We will be making appropriate investments in physical infrastructure and technology at the border, such as creating centres of excellence, sharing trade intelligence, solidifying partnerships with the trade community, and expanding the number of NEXUS and FAST lanes and installing faster document readers,” Gina detailed. “These investments will help ensure that the enhanced efficiencies we have prioritized will be fully realized.”
Minister Fast concluded by characterizing today’s “good neighbours” policy. “Twenty-five years ago, naysayers claimed that (free) trade with the U.S. would wipe out millions of jobs and threaten our Canadian culture. In fact, the opposite happened. The Canadian economy boomed, hard-working Canadians benefited … Canadian culture is alive and well. And to this day, the Canada-U.S. trade partnership remains the world’s greatest free trade success story.”
BELOW ARE SOME OF THE COLLABORATIVE MEASURES TO BE DEVELOPED IN THE BEYOND THE BORDER INITIATIVE:
Increasing reliance on aligned and coordinated security systems for inspecting goods at the perimeter
1. Develop an integrated cargo security strategy, including harmonized and mutually accepted approaches to inspecting inbound air and marine cargo at the first point of arrival in North America under the principle “cleared once, accepted twice.” This would reduce the number of shipments that are subject to re-screening when they are shipped across the Canada-U.S. border. By 2013, pilot projects will be launched that will assess and examine inbound marine cargo at Prince Rupert and Montreal. If successful, these year-long pilots will be made permanent and expanded to other marine ports in Canada and the U.S.
2. For all modes of transportation, harmonize the data that companies are required to submit in advance, including for trans-border shipments, to ease the administrative burden on companies of these important requirements.
3. Develop mutual recognition of air cargo security programs to eliminate the need for duplicate screening.