On Border Update

Excerpted from Border deal just part of agenda in ‘make or break’ year by JOHN IBBITSON

OTTAWA — The Globe and Mail Monday, Dec. 17 2012

Few paid any attention on Friday to the one-year report card on the new Canada-U.S. border agreement. The terrible shootings at Newtown understandably shoved everything else aside.

That report shows the Harper government and the Obama administration still struggling to fulfill the promise of the Beyond the Border agreement on travel, trade and security.

Trade is the issue on which the Conservatives want to be judged. (They certainly prefer it to military procurement.) And 2013 is shaping up as the pivotal year in casting that judgment.

The Harper government will either open Canada more fully to the world, or we’ll simply muddle along. In this economic environment, muddling along simply won’t do.

Among other things, rules are now in place so that passengers with cross-border connections no longer have to check their baggage twice, and there is the pilot project that permits imports bound for the U.S. market to be examined in Prince Rupert, B.C., and then shipped south with no further inspections on the principle of “cleared once, accepted twice.”

But John Manley, the former foreign minister who now heads the Canadian Council of Chief Executives, observed that “the two governments are still negotiating the terms of a comprehensive preclearance system for land, rail and marine cargo even though that plan was supposed to be finalized,” by this month.

He wants both sides to put their back into accelerating and expanding a continental inspection regime.

Not fair, responded David Jacobson, the U.S. ambassador to Canada.

“The overwhelming majority of what we said we were going to do, we did, and for the ones that aren’t on schedule, there were good and valid reasons why they didn’t get done,” Mr. Jacobson told The Globe’s Paul Koring.

But making progress on thinning the Canada-U.S. border is only one aspect of an agenda that will make 2013 a “make or break year,” said Colin Robertson, the former diplomat who now studies and writes on trade issues.

The Harper government is also supposed to be in the very last stages of concluding a comprehensive trade agreement with the European Union. The final issues – on agriculture exports and intellectual property protections – are proving to be the most difficult. If a deal is to be done, ’twere well it were done quickly, for the Europeans and Americans are now looking to negotiate an agreement, and once those talks are started, the Europeans will focus on nothing else.

Canada is finally part of the even more ambitious Trans Pacific Partnership talks, which would create a new free-trade sphere that would link nations in North and South America, the Pacific and Asia. An accord will be reached in 2013, or not at all. And Canada and India have committed to concluding a free-trade agreement in 2013.

The Conservatives face plenty of resistance to their trade agenda. For every action to make it easier and cheaper to sends goods across the Canada-U.S. border, there’s the reaction of a Congress or an administration looking for new fees and charges to help offset the chronic budget deficit.

Powerful lobbies continue to press for agricultural, pharmaceutical and other protections, which complicate trade agreements.

Still, the Conservatives are trying. As Mr. Robertson observes, the report card can point to an increased willingness on the part of Canadian and U.S. officials to harmonize safety and other regulations, so that products manufactured in one country can be sold in both.

If the Harper government can continue to make progress on the Canada-U.S. border, conclude a trade deal with Europe, another with India, and maybe be part of a Trans Pacific agreement, that will make 2013 a good year.

Excerpted from  New border security deal has made Canadians, Americans safer and better off: U.S. ambassador by John Ivison National Post Dec 14, 2012

OTTAWA — Canadians and Americans are safer and better off as a result of the perimeter security deal signed last December by Prime Minister Stephen Harper and President Barack Obama, says the U.S. ambassador to Canada.

David Jacobson pointed to two initiatives he said have increased efficiency at the border – reduction in wait times at airports because of the NEXUS trusted traveller program and mutual recognition of air cargo that means less missing baggage on connecting flights.

He said the choice is not between security or efficiency. “They tend to be the same thing.”

Mr. Jacobson was speaking as the two governments reported “significant progress” on their plan that aims to “thin” their border.

In the first annual report on the “Beyond the Border” and regulatory co-operation programs, they said there has been improved coordination on border management, cyber-security, the NEXUS plan and air cargo security.

“This puts real meat on the bones of what the President and the Prime Minister promised. And we aren’t done yet,” Mr. Jacobson said.

John Manley, president of the Canadian Council of Chief Executives, was less glowing in his assessment.

“To be perfectly honest, it’s more promising than actual results. There are signs that good things are happening but it will require more work,” he said.

He said it remains a difficult challenge to get sovereign nations to think about fluidity at the border as if it were an inter-state or inter-provincial boundary.

Free trade has reduced tariff barriers, but both sides still charge fees for some services, like product inspections.

The council pointed out the goal of pre-clearing goods on the factory floor remains unfulfilled. At the launch last year, both sides touted a pilot project in Prince Rupert, B.C., where goods landed were checked and loaded at the port, then shipped by rail to Chicago, without being re-inspected at the border in Minnesota.

Mr. Jacobson said the need for legislation on both sides of the border has slowed down the rollout of that initiative.

Colin Robertson, a former diplomat and close observer of the Canada-U.S. relationship, said there was nothing new in the progress report but it was a useful taking stock exercise. He said it was significant “Beyond the Borders” still bears the imprimateur of the U.S. President, which sends the message down the chain of command it is a priority.

The target when the deal was struck was to reduce border costs by $16-billion a year – or 1% of gross domestic product.

Mr. Jacobson said the focus on the border highlights a trading relationship that is going from strength to strength. Two-way trade between Canada and the U.S. rose by 38% — or $181-billion — in the last two years.

“Last year alone, Canadian exports to the U.S. increased by $41-billion,” he said.

“Canadian exports to China increased by $4-billion. I think it was Mark Twain who said ‘rumours of my demise are greatly exaggerated.’ ”

Comments Off on On Border Update

Beyond the Border and Regulatory Cooperation A Year On

Beyond the Border, 2013: inching toward a deal iPolitics Insight

By | Dec 12, 2012 9:01 pm

It’s been a year since Prime Minister Stephen Harper and President Barack Obama announced framework agreements on Beyond the Border and the new Regulatory Cooperation Council. While most of the subsequent work has been below the waterline of media interest, let’s look at the progress to date.

Access to the United States market — still the largest in the world and, for Canadians, the most accessible — is an enduring Canadian objective dating back to when we were British North America. A European-style union is not in the cards but a more integrated continental economy, one which includes Mexico, makes a whole lot of sense.

Access to the U.S. has been the trade priority of every Canadian prime minister. Our domestic market is too small to generate the sales we need to put bread on the table and pay for those things, such as medicare, which define what it is to be Canadian.

Defence production led the way under Mackenzie King and Roosevelt. It was followed by the Auto Pact (Pearson and LBJ), the Canada-U.S. Free Trade Agreement (Mulroney and Reagan) and NAFTA (which transitioned from Mulroney/George H.W. Bush to Chretien/Clinton). Some relief from the security curtain imposed after 9-11 was provided by the Manley-Ridge ‘Smart Border Accord’ but the border continued to thicken. The Security and Prosperity Partnership — started by George W. Bush, Paul Martin and Mexico’s Vicente Fox — came to naught.

Mr. Harper had the border on the agenda when Mr. Obama came to Ottawa just after his first inauguration but the issue lost traction. The prime minister had to personally put it back on the president’s agenda – another vindication of Brian Mulroney’s axiom: “If you don’t have a friendly and constructive personal relationship with the president of the United States, nothing is going to happen.”

It is estimated border inefficiencies cost the Canadian economy 1 per cent of GDP, or $16 billion a year — roughly $500 for each Canadian.

So what do our two nations have to show for their efforts a year on, besides some frequent flyer points for civil servants doing the capital shuffle (and not a lot of those, given the bite of austerity)? Three areas stand out: getting goods across the border, easing border congestion, and the process itself.

Supply chain dynamics increasingly account for most of our trade in things like trains, planes and automobiles, soup, and the ubiquitous BlackBerry. Just-in-time delivery is especially critical for the auto trade, still our biggest traded manufacture.

Getting stuff efficiently and quickly across the border is vital for manufacturers. Global production means that more and more of our parts come from Asian workshops. The port closest to those suppliers is Prince Rupert, B.C., where containers are put on trains and shipped south, passing through Portal, Sask., enroute to the industrial hub around Chicago.

Rail cars crossing the border have long been screened for illegal migrants as well as chemical or radiological content — but they’ve still been subject to secondary inspection. Southbound, rail is now handling about 60 per cent of the surface volume (trucks carry the other 40 per cent). Containers arriving at U.S. ports still avoid this kind of rigorous inspection.

Now, joint inspections in Prince Rupert allow faster transit — giving real effect to the principle ‘inspected once, approved twice’. Montreal likely will be the next pilot port for this fast-tracked inspection service, with Halifax and Vancouver to follow. The value of integrated gateways was demonstrated recently when Hurricane Sandy obliged the diversion of cargo to Halifax from East Coast U.S. ports. Halifax was able to double its intake and, between re-transit by sea and more rail cars for land travel, the containers reached their southern destinations with minimal disruption.

For the frequent traveller there are now designated NEXUS lines at most major airports giving ‘fast-pass’ cardholders one less travel headache.

The challenge will be to preserve the pre-clearance facilities at Canadian airports as the fiscal crunch bears down on U.S. departments. Unlike other foreigners, we can remind the Americans that Canadians continue to flock south of the border to spend their money, making more than 21 million visits to the U.S. last year (including 59,619 nights in Florida).

Canadians represent more than a third of all foreign visits to the U.S. Canadians’ annual spending in the U.S. — $24 billion in 2011 — dwarfs the sum spent by Americans stationed in Canada.

We are also beginning to make the border more accessible by constructing new lanes and building facilities designed for easier flow in places like St. Stephen, N.B., and Calais, Maine.

Despite recent blocking efforts, it appears the vital second crossing between Windsor and Detroit is back on track. The trade that crosses the Ambassador Bridge is worth more than all U.S. trade with Japan. National security alone would argue for presidential approval of the necessary waiver and a quick start to bridge construction, which will create thousands of jobs.

The bureaucratic process set in place by the initiatives — especially on the regulatory side — is very promising. Here the Americans are ahead of us. A pair of Executive Orders (the equivalent of cabinet directives) oblige U.S. regulators to demonstrate why they would diverge from complementarity in new regulations with regulatory partners like Canada.

Working groups across the current designated areas are using a sensible schematic in looking at new rules:

  • Is it really required?
  • Is there another way to address the requirement (i.e., data sharing)?
  • For those deemed necessary, can administrative burdens be reduced or eliminated?

There is also a process to re-examine old rules and bring them into line with the new approach. The best net effect would be a change in attitude among those who administer the rules. The current enforcement mentality should evolve into one of common sense and risk-management aimed at expediting people and goods. This alone would be a very positive outcome.

A shrewd Canadian ‘ask’ was for an inventory of border fees and charges. As the U.S. approaches its ‘fiscal cliff’, it’s almost certain that there will be an effort to find alternate revenue sources such as the $5.50 fee levied last October on Canadians entering the U.S. by air or sea as ‘compensation’ for revenue lost under the U.S.-Colombia Free Trade Agreement. We need to be vigilant about new border fees.

After nearly seven years in office, Prime Minister Harper has got to be thinking of his legacy. Beyond the Border and regulatory cooperation would be an historic achievement.

But President Obama also needs this deal. He has pledged to double American exports. The twin initiatives with Canada, America’s biggest trading partner, will advance that goal but it will require continued attention from the president to make it happen.

At a time when questions are being asked about the direction of American policy, the ability of the U.S. to deliver on a deal with Canada will not be lost on officials in Mexico City, the partners in the Trans Pacific Partnership and friends and allies everywhere.

Comments Off on Beyond the Border and Regulatory Cooperation A Year On

Harper Foreign Policy

Excerpted from Embassy Harper grips the Diplomatic Reins tightly by Ally Foster
Published: Wednesday, 12/12/2012

tighter, as part of his years-long undertaking to fundamentally rebrand Canada at home and abroad, say former diplomats and other observers.

A look at the scorecard over the past year reveals both diplomatic courting and breakups for Canada. There has been talk of sharing consular digs with the Commonwealth, as well as temporary and permanent boarding up of embassies.

Security reports for missions abroad and foreign policy plans have been leaked, and major foreign investment deals have been made.

In November, Mr. Harper visited India for the second time since being elected in 2006, and also made a second visit to China in February of this year.

In late-breaking news, Mr. Harper announced the approval of the $15.1 billion takeover of Nexen Inc. by Chinese oil giant CNOOC, as well as giving Malaysia’s Petronas oil and gas company the green light to buy Calgary’s Progress Energy, on Dec. 7.

Meanwhile, Mr. Harper laid out rules that will block most foreign ownership of oil sands assets by state-owned enterprises.

Canada expanded its reach in 2012 by announcing in July that it would open its first-ever embassy in Myanmar, also known as Burma, after months of easing sanctions against the country in light of perceived democratic and human rights progress.

But the November leak of the government’s long-awaited foreign policy plan was, according to CBC News, focused largely on trade priorities, to the chagrin of some observers. The CBC also reported that it lacked any mention of prior Canadian foreign policy hallmarks such as peacekeeping and international development.

‘Fundamental rebranding’

This was “not a banner year for Canadian diplomacy,” argued former Canadian diplomat Daryl Copeland, now a senior fellow at the Canadian Defence and Foreign Affairs Institute.

“It’s less…what we did do in the world, than what we didn’t do,” he said, adding this has been part of a growing trend over the past decade.

Nevertheless, he highlighted the breaking of diplomatic ties with Iran, which Foreign Minister John Baird announced on Sept. 7, and Mr. Baird’s decision to temporarily recall Canadian representatives from Israel, the West Bank, and the United Nations after voting against the successful Palestinian bid to become “non-member observer state” at the UN. That effort saw Canada end up in the severe minority, with nine nations voting against the bid, 138 voting in favour, and 41 abstaining.

There has been a “fundamental rebranding of Canada,” said Mr. Copeland—one that shows the country drawing a hard line on issues, as opposed to its previous international reputation as a moderate.

But another former Canadian diplomat, Colin Robertson, said he sees a promising government approach to foreign policy. He wrote in an email of “an increasingly coherent Conservative international [policy].”

He highlighted Trade Minister Ed Fast’s “quiet diligence in promoting trade deals” and Mr. Baird’s “articulation of the Conservative foreign policy.” While Mr. Fast works to tie the knot in trade talks, he argued, “he has been the quiet constantly plodding forward tortoise to John Baird’s Energizer Bunny.”

“Like it or not, John Baird is an authentically Canadian voice on foreign policy. There is no question about us not having a policy.”

Harper in control

The CNOOC and Petronas decisions showed that the Harper government is committed to racing “full speed ahead” into Asia, wrote Mr. Robertson.

He was surprised, however, at “the government’s poor job in selling the Asian strategy,” compared with the amount of time the government talked up its potential trade deal with the European Union.

Meanwhile, Gordon Smith, a former deputy minister at what is now DFAIT, said the government has a “foreign policy that’s driven by the people around the prime minister.”

This has happened with previous PMs, and isn’t entirely new, he added. Even so, he said this Prime Minister’s Office “doesn’t fully trust the public service [and] isn’t comfortable with the kind of advice the public service gives. There’s an uneasiness in that relationship.”

Canada’s relations with the UN are also uneasy, noted Mr. Smith, who is now a distinguished fellow at the Centre for International Governance Innovation.

“The UN obviously is in the dog house with this government,” he said, pointing to Mr. Harper’s decision not to attend the UN General Assembly on Sept. 27, despite being in New York to accept the world statesman of the year award for 2012, presented by the Appeal of Conscience Foundation.

Comments Off on Harper Foreign Policy