Is There Life Beyond the Border?

The Obama and Harper governments have big plans to make the border easier for traders and travellers.  The Beyond the Border (BTB) initiative is the kind of high-level bilateral cooperation that we haven’t seen since the pre-NAFTA days.  But, unprecedented cooperation and nimble government footwork will be required to put meat on the bones of this agreement.  With a Presidential election around the corner, the window of US attention is closing fast.  No politician will support changes that might upset voter sensibilities on security and immigration. Even where changes are politically feasible, the US fiscal crisis means there is little money for better borders.  Any proposals that reduce revenues from administrative fees and tariffs will be a non-starter.  The ball is in Canada’s court to come up with smart, feasible proposals that don’t require US compromise on fiscal or security issues.  Change is possible but only where the US can see clear economic benefits without political risk.

Canada has had historic success with big initiatives like the CUFTA and Auto Pact but big and smart aren’t the same thing.  Smart proposals will require Canadian policy planners to step into the shoes of U.S. legislators and figure out where the shared interests lie and work to improve existing frameworks to yield future successes.

For example, the labor mobility issue has captured much attention in Canada but it is dangerous ground in the United States.  First, since a NAFTA Labor Mobility Working Group already exists, the United States will feel great pressure to keep discussions in the trilateral forum where Mexico’s undocumented worker issue will always dominate.   (The American objective is to improve relations with both of its North American partners, not jilt one to pacify the other.)  Secondly, while the movement of service providers is a matter of commercial policy, the question of who is permitted to deliver cross-border services is an immigration question governed by a separate legal and administrative regime. Improving the implementation of existing NAFTA labor mobility measures is probably the best Canada can hope for in the near term.

As the smaller partner (and greater beneficiary) in a rationalized border scheme, it is quite likely that proposals will originate in Canada but the U.S. will hold veto power. If the options on the table do not offer tangible benefits to American voters, political attention will drift to other issues.

Simon Kennedy, the Canadian official leading the BTB team seems to be doing all the right things in preparing to deliver an Action Plan in September. He is accessible and is mobilizing lots of outreach – both to Canadian stakeholders and to the U.S. BTB team led by Dan Restrepo.  There is no shortage of suggestions for Kennedy and Restrepo. Since the announcement in February, trade and business organizations have been churning out recommendations.  The challenge is to figure out which proposals have what it takes to run the gauntlet of U.S. political and fiscal obstacles.

One of the most interesting proposals is a joint submission from Businesses for a Better Border (B3), a coalition of Canadian and American manufacturing and automotive associations.  Similarly, the Chambers of Commerce from Canada and the United States have compiled a shared submission. By identifying shared interests early and mobilizing stakeholders on both sides of the border, this group might have hit on the best strategy for generating forward momentum in difficult times.

Who wants what?

Joint United States and Canada Chamber of Commerce Proposal

B3 – Businesses for a Better Border Proposal

Canadian Council of Chief Executives Proposal

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