En Route to a More Efficient Border

The following remarks were presented at the 5th annual Rendezvous du Transport on June 12, 2013 in Sherbrooke, Quebec. The event was organized by the Pôle d'excellence québécois en transport terrestre.

Across the border

The roads and rails of the United States and Canada remain at the core of our prosperous economic development in North America. Unlike trade with many of our other partners, ground transportation is the most critical link in our trading relationship with Canada. Road and rail remain essential for U.S.-Canada exchange because every day, nearly 29,000 trucks cross the border; in other words, $800 million worth of goods and services cross the border daily via roads and another US$250 million via rail.

Despite these impressive statistics, there is still room to grow. Analysts expect investment in the U.S. logistics and transportation sector will continue to increase in line with the U.S. economy. The U.S. logistics and transportation industry totaled nearly $1.3 trillion in 2011, moving 9.2 billion tons of freight. We welcome continued and augmented partnerships with you and your companies.

On that matter, last May, I joined CSX Intermodal Terminals President Wilby Whitt and Salaberry-de-Valleyfield Mayor Denis Lapointe to participate in the formal groundbreaking for a new intermodal terminal in Salaberry-de-Valleyfield, which is expected to open in 2015 and to help strengthen trade opportunities. The new facility is valued at over $100 million and will be able to handle 100,000 containers a year. This investment by a U.S. company in Quebec reflects close economic ties between the United States and Canada and both countries’ ongoing commitment to strengthen trade under the Beyond the Border initiative.

Across the border and beyond!

While the amount of trade between our two countries is immense, both neighbors must try to improve the flow of goods and services across our borders while also maintaining security. In order to do so, President Obama and Prime Minister Harper in early 2011 committed to work on several breakthrough initiatives that they hope will pave the way for greater economic prosperity for people and companies on both sides of the border.

One of these key initiatives is Beyond the Border (BTB). The 32-point Beyond the Border Action Plan, introduced on December 7, 2011 aims to make trade more efficient while enhancing security. Another essential goal is to reduce delays for those who cross the border, such as through existing border crossing expediting programs such as NEXUS and CT-PAT.

In the first year of BTB, our countries made significant progress in achieving the goals set out in the President and Prime Minister’s declaration. We are always looking to reduce logistical burdens on small businesses and to increase sensitivity and responsiveness to the needs of small businesses engaged in cross-border trade. We are also committed to work on ways to facilitate bus and rail passengers by making use of Advanced Passenger Information programs. A major focus right now is negotiation of a Marine, Rail and Land pre-clearance agreement.

Several Beyond the Border initiatives have been achieved over the past year, which provide both economic benefits and enhanced security. An example may be providing additional benefits to trusted travelers, including expedited passenger screening at U.S. airports for Canadians travelers, which makes it easier to travel to more than one U.S. destination, and boosts tourism in both countries.

In addition, this year, we signed a Memorandum of Understanding with Canada to implement a cargo pre-inspection pilot in which United States Customs and Border Protection officers will clear truck cargo in Canada prior to it reaching the U.S.-Canada land border. Phase one of the pilot program will be deployed this spring at Peace Arch, British Columbia, opposite Blaine, WA, and Phase two, is expected to be deployed in the fall of 2013 at Peace Bridge, opposite Buffalo, New York. On the principle of “cleared once, accepted twice”, this project intends to facilitate the movement of cross-border cargo.

NEXUS membership has increased by 25 percent to a total of almost 800,000 members and at the land border those travelers are processed 50 percent faster than those in regular lanes. Folks are getting more out of their NEXUS card too, gaining access to expedited screening lanes at Canadian and United States airports, enjoying a simplified renewal process, and having more lanes and kiosks at a greater number of ports of entry.

Another initiative is the Regulatory Cooperation Council, which was created in February 2011. This council was designed to achieve greater harmonization between the standards and regulations adopted by the Canadian and American governments so that companies that are manufacturing one product for the Canadian market, don’t have to make substantive modifications to sell it in the U.S. market.

In fulfilling its mandate to promote economic growth and job creation, the Regulatory Cooperation Council has spurred unprecedented cooperation to provide benefits to our consumers, regulators, and businesses through increased regulatory transparency and coordination while maintaining high standards of public health and safety and environmental protection.

The Council has achieved significant progress over the past year, including pilot projects for simultaneous submissions to regulators in both countries for approval of crop protection products and a proposal to align U.S. and Canadian rules on tire safety and occupant restraint systems in frontal impact collisions. Both initiatives build on our well-established bilateral cooperation on trade, investment, emergency preparedness, and security. They also describe specific initiatives with timelines for implementation that promote transparency, efficiency, and the free and secure flow of people and goods.

We intend to continue to work together under these initiatives through 2013, 2014, and beyond to reduce and eliminate barriers to trade and investment, securing our shared competitiveness for the 21st century. And this is why on May 31, 2013, our governments announced the first-ever Binational Border Infrastructure Investment Plan that offers enhanced security while reducing wait times and increasing the flow of traffic at least at our land ports of entry. The Investment Plan follows recent announcements by the Government of Canada of significant investments at four initial priority land ports of entry, notably at Lacolle, in La Belle Province.

We want to ensure safe and secure trade and travel for all our citizens. It is a step toward the modernization of our infrastructures, essential to the efficient flow of trade and travelers.

A strong and longstanding partner

In a context where the global economy is still fragile, it is natural to turn to our strong and longstanding partners. Such is the relationship between the United States and Canada. Since the Free Trade Agreement in 1987 and the North America Free Trade Agreement (NAFTA) in 1994, the trade relationship between the United States and Canada has been an essential component for both countries. Our geography and values that we share allow us an enviable partnership.

In 2012, Canada and the United States trade $616.7 billion in goods. To put this in context, it is roughly 10 times the amount that the United States traded with India, and nearly three times the amount it traded with Japan. Despite what many may believe, Canada – not China – is the United States’ top trading partner, and in 2012 Canada’s trade in goods with the United States was greater than China’s trade with the United States by a margin of almost $100 billion according to the United States Census Bureau.

We are also delighted to sit at the Trans-Pacific Partnership negotiation table alongside Canada, looking for solutions to outstanding sensitive trade issues within the Pacific economic region, of which we are both a part. The 17th round of negotiations ended in Peru last May, and the parties continue to forge ahead toward their goal of concluding an ambitious 21st-century agreement.

We believe this Partnership will advance a next-generation trade and investment agreement to enhance our competitiveness while promoting labor rights, environmental protection and transparency. If Japan gains entry, the 11 member countries would account for 40% of global GDP and about one third of all world trade.

What makes the Canada-U.S. relationship especially unique is that we both are investing in each other’s economies, and we believe that this is the true test of any economic partnership. In 2011, Canadian and American companies invested $530 billion in cross-border business ventures. In the same year, Canada was the world’s fourth largest investor in the United States; its business investment in the United States accounted for 10% of all foreign investment and totaled $245 billion.

Conclusion

Ground transportation is critical for U.S. and Canada partnership; without cross-border terrestrial transportation, our economies would not be as strong. Your work is a critical link that moves people and trade goods from one country to another. You are the ones on the road supporting our relationship and initiatives and we thank you for that. Let’s hit the road!

For more information, please visit http://btb-rcc.canada.usembassy.gov/.