When you are in a hole, you must find a way out. For Canada, expanding our trade relationships in order to expand our economy is still the best way to get ourselves out of debt. Our main customer will always be the United States, which is still the world’s biggest market. With our updated trade agreement, the United States-Mexico-Canada Agreement (USMCA), coming into effect July 1, we need to seize this opportunity.
It starts with reopening the Canada-U.S. border. We applied risk-management principles after 9/11 to provide secure, but efficient, cross-border passage. We must do so again in addressing the COVID-19 pandemic.
The recent border shutdown extension, now in effect until July 21, will mark four months of closing to all but essential traffic between Canada and the U.S. This deprives us of trade and investment opportunities. Health considerations must be made, but surely there is room to consider regional openings.
Ours is a long border. The stretch from the Atlantic to the Pacific is almost 9,000 kilometres (further than the journey from London to Beijing), while the line dividing Alaska and Yukon is another 2,200 km (equivalent to the distance from Moscow to Berlin). The European Union – which is half the size of Canada – has created travel bubbles. We should do the same.
In managing this pandemic, each province has responded to its own circumstances. Our island provinces and Quebec temporarily closed their borders. The North remains shut. Reopening began in Manitoba and Saskatchewan. In Ontario, restrictions were first relaxed outside of Toronto. One-size-fits-all has not applied within Canada. Let’s demonstrate the same flexibility in reopening to tourism and commerce.
Why not implement an approach that allows the premiers, in consultation with the federal government, to determine access for outsiders, starting with travellers from the U.S.? Start with pilot projects at our smaller crossings, such as Sweetgrass, Mont., and Coutts, Alta. Let’s move forward with a proposed project by the Future Borders Coalition, wherein travellers from the U.S. could be precleared for entry at Vancouver International Airport. Canada can become a global leader in safe reopening, but it will require innovation and risk management. Alaska has demonstrated leadership in this regard, with clear requirements for passage in and out of the state: All entrants must have a COVID-19 test administered upon entry or show proof of a recent negative test.
The pandemic is accelerating consumer use of digital trade. Fortunately, the USMCA chapter on digital trade is best in class, as it allows for the creation of a digital portal for trade information. As with other parts of the agreement, there is provision for stakeholders to keep the USMCA evergreen and tackle challenges such as the technical barriers to trade. Industry and industry associations were energized by the USMCA. They need to stay vigilant and keep governments focused on expediting cross-border trade.
A key challenge as we work our way out of the pandemic will be to digitize our current paper-dependent supply chains. We must make our North American trade platforms more efficient by increasing our reliance on digital systems and technology. This should include applying digital technology to the rapid delivery of emergency relief supplies and, eventually, an efficient and verifiable global vaccine distribution process. Using artificial intelligence, big data analytics and blockchain technologies, the Swiss-based Global Coalition for Efficient Logistics is doing groundbreaking work on creating platforms for digitizing trade. North America should be the road test for its application. That work, as well as the continuing practical efforts on supply chains and logistics by the North American Strategy for Competitiveness (NASCO), would position North America for more investment.
Digitization is the infrastructure of the future. It’s the kind of big-picture project needed by all three North American federal governments and our 95 states, provinces and territories. Using technology creates greater efficiency and transparency while reducing costs and improving access to finance and insurance. Digitization helps level the playing field for small and medium-sized enterprises, and the U.S. is still the easiest market for these businesses to access. If we get it right in North America, this platform and its standards can have global applications, starting with our transatlantic and transpacific partnerships.
The ride to the USMCA was bumpy. U.S. President Donald Trump’s imposition of steel and aluminum tariffs reminded us of both the importance of the American market and how vital supply chains are to North American prosperity. The U.S. buys three-quarters of Canada’s exports and remains our biggest investor. As the U.S. decouples from China and supply chains are rerouted to North America, there are opportunities for Canada. It starts with the regional, risk-based reopening of our borders, followed by taking a leadership role in digitized trade.