Both Canada and the United States need to take action to avoid further erosion of the strained business relationship between the two countries, says Canada’s largest business organization.
Many of the benefits that came from eliminating tariff barriers between Canada and the U.S. have gradually been lost due to regulatory differences and border inefficiencies, according to a new report by the Canadian Chamber of Commerce.
“Canada and the U.S. have a long, vibrant history of cooperation and success, but it is clear that bilateral relations have drifted,” said Chamber president and CEO Perrin Beatty in a statement released with the report.
“At a time when the global economy is undergoing significant shifts, it is imperative that both countries recognize the advantages of the integrated North American market.”
Entitled “Strengthening Our Ties: Four Steps Toward a More Successful Canada-U.S. Partnership,” the report examines how Canada’s relationship with the U.S. has become strained in recent years and outlines four areas—trade, regulatory policies, the border, and energy security and the environment—where “notable progress” would potentially strengthen economic growth and prosperity for both countries.
Canada in particular needs to develop a “dedicated strategy for engagement” in the U.S. that focuses on highlighting the gains made from the North American Free Trade Agreement and promoting free trade.
Protectionist policies adopted by the U.S. to combat the financial crisis, such as the 2008 Buy American requirement, ignored the integrated nature of North American supply chains and harmed businesses on both sides of the border, according to the report.
“Canada must convey that policies that hinder the free flow of legitimate goods and services across the border not only reduce North American competitiveness but also weaken the foundations underpinning NAFTA,” the statement said.
Recent Statistics Canada data shows that Canada’s trade with the U.S. has been dwindling, particularly for manufactured goods. Stats Can’s annual review of merchandise trade confirmed that Canadian exports to the U.S. dropped by almost 25 per cent in 2009.
For the first time, countries other than the U.S. accounted for more than a quarter of Canadian exports. American exports to Canada also declined during this period, having decreased by 21.6 percent from 2008.
“While this decline can partially be attributed to the effects of the economic recession, the shift in trade patterns is still startling and is cause for concern,” says the report.
To avoid further erosion, Canada needs to present Washington with “new goals, new ideas, and new areas for partnership that will not only secure the future of both economies but will create jobs and make both countries more competitive,” the statement said.
The U.S. would also benefit in that Canada is a close ally, an important source of secure, reliable energy, a major destination for U.S. exports, and a key element in North American production networks.
“The key to recharging this relationship is ensuring Canada is seen as the solution to the serious economic problems the U.S. is facing,” said Beatty.
“President Obama’s call to double American exports in the next five years has been one of his few economic gestures to attract support from all sides. If America is going to achieve this ambitious goal, it’s going to be in part because of Canada.”
Since NAFTA entered into force in 1994, the total bilateral merchandise trade has grown by more than 120 per cent. Eight million jobs in the U.S. and three million in Canada depend on continued bilateral trade, and Canada is the largest export market for 35 out of the 50 U.S. states.
“Yet the true importance of the Canadian market to the U.S. is often underestimated,” states the report.
With news reports circulating that Ottawa and Washington are negotiating an unprecedented “perimeter security” deal, the Chamber is calling for improved border efficiency.
Layers of new fees and inspections, different regulations imposed by various departments, wait time uncertainty, and infrastructure restraints, have served to clog the border and increase the cost of travelling and doing business in recent years.
“The border does not need to be an unmanageable burden for our governments,” said Beatty. “It is an opportunity to once again work together to design a strong, secure border that focuses on stopping the illicit trafficking of goods and people while promoting legitimate travel and trade.”
Many of the benefits that came from eliminating tariff barriers between Canada and the U.S. have gradually been lost due to regulatory differences and border inefficiencies, according to a new report by the Canadian Chamber of Commerce.
“Canada and the U.S. have a long, vibrant history of cooperation and success, but it is clear that bilateral relations have drifted,” said Chamber president and CEO Perrin Beatty in a statement released with the report.
“At a time when the global economy is undergoing significant shifts, it is imperative that both countries recognize the advantages of the integrated North American market.”
Entitled “Strengthening Our Ties: Four Steps Toward a More Successful Canada-U.S. Partnership,” the report examines how Canada’s relationship with the U.S. has become strained in recent years and outlines four areas—trade, regulatory policies, the border, and energy security and the environment—where “notable progress” would potentially strengthen economic growth and prosperity for both countries.
Canada in particular needs to develop a “dedicated strategy for engagement” in the U.S. that focuses on highlighting the gains made from the North American Free Trade Agreement and promoting free trade.
Protectionist policies adopted by the U.S. to combat the financial crisis, such as the 2008 Buy American requirement, ignored the integrated nature of North American supply chains and harmed businesses on both sides of the border, according to the report.
“Canada must convey that policies that hinder the free flow of legitimate goods and services across the border not only reduce North American competitiveness but also weaken the foundations underpinning NAFTA,” the statement said.
Recent Statistics Canada data shows that Canada’s trade with the U.S. has been dwindling, particularly for manufactured goods. Stats Can’s annual review of merchandise trade confirmed that Canadian exports to the U.S. dropped by almost 25 per cent in 2009.
For the first time, countries other than the U.S. accounted for more than a quarter of Canadian exports. American exports to Canada also declined during this period, having decreased by 21.6 percent from 2008.
“While this decline can partially be attributed to the effects of the economic recession, the shift in trade patterns is still startling and is cause for concern,” says the report.
To avoid further erosion, Canada needs to present Washington with “new goals, new ideas, and new areas for partnership that will not only secure the future of both economies but will create jobs and make both countries more competitive,” the statement said.
The U.S. would also benefit in that Canada is a close ally, an important source of secure, reliable energy, a major destination for U.S. exports, and a key element in North American production networks.
“The key to recharging this relationship is ensuring Canada is seen as the solution to the serious economic problems the U.S. is facing,” said Beatty.
“President Obama’s call to double American exports in the next five years has been one of his few economic gestures to attract support from all sides. If America is going to achieve this ambitious goal, it’s going to be in part because of Canada.”
Since NAFTA entered into force in 1994, the total bilateral merchandise trade has grown by more than 120 per cent. Eight million jobs in the U.S. and three million in Canada depend on continued bilateral trade, and Canada is the largest export market for 35 out of the 50 U.S. states.
“Yet the true importance of the Canadian market to the U.S. is often underestimated,” states the report.
With news reports circulating that Ottawa and Washington are negotiating an unprecedented “perimeter security” deal, the Chamber is calling for improved border efficiency.
Layers of new fees and inspections, different regulations imposed by various departments, wait time uncertainty, and infrastructure restraints, have served to clog the border and increase the cost of travelling and doing business in recent years.
“The border does not need to be an unmanageable burden for our governments,” said Beatty. “It is an opportunity to once again work together to design a strong, secure border that focuses on stopping the illicit trafficking of goods and people while promoting legitimate travel and trade.”
