Transcript A Look at Canada

A Look at Canada-US Relations
Fight, Work and Play
Our Trade: Some Facts
• Over 8 million U.S. jobs depend on trade and investment
with Canada
• Canada is the top export destination for 35 states
• Canada is the United States’ largest and most secure
supplier of energy: oil, natural gas, electricity and nuclear
fuel
• 400,000 people cross the Canada–U.S. border daily
• 40% of trade is intra-firm
• 1/3 of Canadian exports to U.S. contain U.S. 'content’
Source Canadian Embassy in Washington
Canadian Trade with Illinois
• Over 300,000 jobs in Illinois depend on trade and investment with
Canada
• Canada is your top export market – bigger than Illinois next four
destination markets put together
• CN Rail, BMO Harris Bank run their US operations from Chicago
• Canadian investment creates 25,000 jobs in Illinois
• 70% of Canadian crude exports to the USA comes to the midwest
market
• A million Canadians visited Illinois last year spending $300 million
Source Canadian Consulate Chicago
Supply Chain Dynamic …
We Make Stuff Together
Oil
Observations
• Allies, Partners and Friends
• Deep economic integration – more than trade we
make stuff together
• Primary Canadian objective is access for goods,
people and services
• Regulations have replaced tariffs as main trade
barrier
• 9-11 and US security concerns/paranoia and oldfashioned protectionism are ongoing Canadian
challenges
Canada and Mexico
Mexico
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NAFTA (1994) and the CanadaMexico Partnership (2004), Joint
Action Plan (2010) focused on
fostering competitive and
sustainable economies; protection
of citizens of both countries;
enhancement of people-to-people
contacts and the projection of the
partnership regionally and
globally.
Interparliamentary association,
North American Summits
2500 Canadian companies
currently operating in Mexico,
including giants such as
Bombardier, Scotiabank, Magna,
Blackberry, Goldcorp and CP
17,000 temporary agricultural
workers and 10,000 students
And play
•
Second most important tourist
destination for Canadians with
some 1.8 million visits per year vs
130,000 from Mexico, low in part
because of visa restriction applied
in 2009.
Observations
• Trade, Investment and Tourism continues to grow
from Canadian side
• Mexicans see no natural fit for investment in
Canada
• Canadian Visa restriction hampers Tourism,
Trade, Investment
• Government to Government Institutions need to
be revitalized
• Canada can do much more in technical assistance
on policing and judicial training as we have done
on election reform
NAFTA worked…
Canadian Trade Partners
US Trade Partners
U.S. Trade with North America, 1992-2012
AAGR is Average Annual Growth Rate. Sources: TradeStats Express, U.S. Census Bureau, OECD, WTO, Industry
Canada
Trade by Truck and Rail
but it peaked in 2000
US thickens the borders
…,with new security at the crossings
Cost of Delays & Missed Opportunities

Annual cost of delays and border security restrictions: $27 billion (2.7% of trade in 2008)

Border transfer cost of ‘drayage’ (prohibiting trucks) $616 million in 2008 (or 15% of volume of
trade)

Cost of building a wall on the southern border: $2.1 billion

Annual cost of cabotage (Jones Act): $656 million

Annual Cost of “rules of origin” procedures approx. $35.7
billion
 Annual cost of divergent regulations totals 2-10 % of
production costs
Sources: Robert A. Pastor, The North American Idea (New York: Oxford University Press, 2011); Alex James Appiah, Applied General Equilibrium Model of North
American Integration with Rules of Origin, Doctoral Dissertation for Simon Fraser University, November 1999; Michael Hart, “Trading Up: The Prospect of
Greater Regulatory Convergence in North America,” (U.N. Economic Commission for Latin America and the Caribbean, April 2007).
The Public Gives Priority to North America
Public Wants More Cooperation on
Transnational Policy Issues
U.S. Support for Common Border Policies
Observations
• Asymetrical: US is the hub with Canada and
Mexico trying to avoid being spokes
• More dual bilateralism than trilateralism
• NAFTA has baggage (unfairly) as symbol for
outsourcing and job loss
• Potential is still great: Resources, including
Energy, Market, Labour with improving
Transportation grids make for increasingly
integrated North American supply chains
… Trilateralism needs renovation thus Trans Pacific
Partnership
Comparing North America with TPP and TTIP: What should be
our priority, strategically and tactically?
 In 2010, the three North American
countries accounted for 90% of the
gross domestic product of TPP
countries excluding Japan, and 82% of
U.S. exports to TPP countries go to our
two neighbors, Mexico and Canada
Trans Pacific Partnership (TPP) includes Australia, Brunei Darsussalam, Canada, Chile, Malaysia ,Mexico, New Zealand, Peru, Singapore,
Vietnam and the United States.Note: TPP GDP without the U.S. is $2.594 trillion
Sources: APEC and North America data from StatsAPEC, GDP and total trade for Western Hemisphere and TPP from World Bank dataBank,
US exports data from US Census Foreign Trade division
NAFTA…it still works