Trade corridors need protection from protectionism

by Colin Roberston

Winnipeg Free Press
September 25,  2012

As the historical gateway to the West, Winnipeggers instinctively appreciate the importance of trade and the role of transportation.

Trade is increasingly based on efficient production. That demands the just-in-time arrival of a part, a piece of equipment, or a person who can quickly fix things. Investment decisions are calculated on production chain dynamics and the proximity to resources and markets.

Improving transportation for the flow of people and movement of goods is the focus of this week's meeting in Winnipeg of the North American Corridor Coalition (NASCO), the tri-national association of heartland states and provinces, cities and business that support more than a trillion dollars in continental commerce.

The infrastructure that serves our production chains -- our roads and rail lines, our sea and airports, our power grids and pipelines that fuel our factories and offices -- must link seamlessly. Get it right and we all prosper. This is the logic of CentrePort.

The big idea that binds NASCO is North America as a production platform that draws on pooled capital, resources and labour to serve a market of 450 million consumers.

It's not new -- it was a key argument behind the Canada-U.S. Free Trade Agreement and then the North American Free Trade Agreement. Those agreements ushered in a decade of prosperity and the World Bank estimates North America has achieved an integration level of 50 per cent. But for the European Union the integration level is 73 per cent and in Asia it is 53 per cent. We have to do better.

Today, Canada is moving forward again through a series of initiatives designed to both improve our continental platform and open new opportunities abroad.

We are in the midst of more than 50 trade and investment negotiations. A comprehensive agreement with the European Union should be ready by Christmas. We are on the verge of admission into the Trans Pacific Partnership. We just signed an investment agreement with China and we are now looking at a bigger deal.

But, for Canada, our best market and the biggest market in the world is the United States. Last December, Prime Minister Harper and U.S. President Barack Obama created a framework agreement around two initiatives: Beyond the Border and the creation of a Regulatory Co-operation Council.

Beyond the Borders is making progress in creating a new code that should speed along the legitimate travel of people and goods. The Regulatory Co-operation Council is designed to lift the 'tyranny of small bilateral differences' that apply to everything from our orange juice to the Cheerios that U.S. Ambassador Jacobson eats for breakfast.

These initiatives will require an attitudinal change in those who administer our borders. The current approach puts the emphasis on enforcement and security with zero tolerance. That mindset must change to recognize that expediting the flow of people and products is vital to our economic security.

Business leadership is ahead of the curve. They already design their production on continental lines and through global supply chains.

Experience also demonstrates that progress depends on regional experimentation and pilot projects -- such as the smart driver's licence that expedites the flow of travellers across our borders. What seems impossible when viewed from our federal capitals is often quite doable from a local or regional lens.

The evolution of our 'hidden wiring' -- our premiers and governors with legislators from our 96 states and provinces, all of whom either enjoy or share constitutional responsibilities for trade, transportation, resources, education and the environment -- has been vital to both continental integration and opportunities abroad.

The catalysts for action are the cross-border organizations, especially those with a functional mandate such as NASCO. They keep the ball moving by bringing the players together, through generating new ideas and by maintaining focus on what needs to be done.

We must avoid the siren call of protectionism. When borders become choke-points, then production lines slow and the prosperity of all partners is diminished. Beggar-thy-neighbour policies such as 'Buy America' or 'Buy Canada' cost taxpayers and do little to protect jobs.

Protectionism is rooted in the false belief we can't compete. It is a defeatism that defies our collective heritage. The North American story is built on beating the odds through a can-do attitude and communities working across borders for mutual prosperity.

The North American idea is ready to go the next step. It is not the EU model but rather a North American idea: three sovereign nations committed to a platform based on shared production, access to markets, and making efficient use of our labour and resources.

Former diplomat Colin Robertson is senior adviser to McKenna, Long and Aldridge LLP and vice-president of the Canadian Defence and Foreign Affairs Institute. He is speaking at the NASCO conference that starts today. His first commercial experience was as a paperboy for the Winnipeg Free Press.