Dear Prime Minister Trudeau, President Obama and President Peña Nieto:
In anticipation of the upcoming North American Leaders Summit (NALS), we, on behalf of our organizations – the Business Roundtable, the Business Council of Canada, and the Consejo Mexicano de Negocios – are writing to set forth our priorities for strengthening economic relations across our countries.
A strong North America marketplace is crucial to the long-term prosperity of our countries. Our companies and their workers sell goods and services to one another and make products together that they sell around the world. Deeper collaboration among Canada, Mexico, and the United States should focus on improving our international competitiveness, supporting economic growth and jobs in our countries, facilitating the legitimate movement of people, goods, services, capital, and energy between our countries, and addressing emerging challenges such as cybersecurity.
The opportunities for mutually reinforcing economic growth and jobs are enormous. With a combined population of 500 million, immense energy resources, world-leading innovation hubs, deep capital markets, and high-quality institutions, North America has the assets required to be the world’s most dynamic region for many years to come. The key is that we take more deliberate steps to turn these opportunities into concrete outcomes.
In October 2013, our organizations outlined a vision for North America and identified priority action items in the attached letter to the heads of our three governments. We focused on intelligent border systems, regulatory cooperation, and energy security and sustainability. In the years since, our countries have progressed on some aspects of this agenda while other items remain undone. We urge you to continue to work closely together to make additional progress in the areas highlighted in that earlier letter. For example:
- In the area of intelligent border systems, we emphasized the need to carry through with the types of practical measures set forth in the U.S.-Canada Beyond the Border process and the U.S.-Mexico 21st Century Border process. We appreciate the progress that has been made. For example, our letter called for the expanded use of pre-clearance arrangements. We were heartened by the comprehensive pre-clearance agreement signed between Canada and the United States in March 2015 and fully support its swift implementation. We also would like to see continued expansion of pre-clearance arrangements on the U.S.-Mexico border. We further believe other measures, from the adoption of new border technologies to more extensive resource sharing at ports of entry, still need more attention and progress. We also continue to support the vision of greater public-private partnership in facilitating legitimate cross-border trade and travel.
- With respect to regulatory standards and practices, our letter commended our three governments for recognizing the significant impact that regulatory divergences have on North America’s competitiveness. We recognize that addressing regulatory divergences is hard work and takes time to succeed. In August 2014, Canada and the United States took a step in the right direction with the announcement of the Joint Forward Plan – a long-term mechanism to minimize future regulatory divergences. We hope to see more progress in the U.S.-Canada regulatory cooperation process as well as in the U.S.-Mexico regulatory cooperation process.
- On energy security and sustainability, our letter posited that North America has a tremendous advantage in all types of energy. We recommended that the U.S. Congress enact the U.S.-Mexico Transboundary Hydrocarbons Agreement and are pleased that they did so in December 2013. We also were very pleased to see the steps that have been taken in response to our recommendation for a North American “energy outlook.” In particular, the new mapping exercise that North American energy ministers unveiled at their February 12 meeting will greatly improve the understanding of the totality of North American energy assets, the linkages that already exist in the marketplace, and the opportunities to further expand our comparative advantage. Other recommendations, such as encouraging the further development of lower-carbon energy, need additional work. We also continue to support the creation of a trilateral public-private committee charged with recommending policies to strengthen the efficiency, sustainability, and safety of processes for developing the continent’s abundant energy resources.
Agenda for the 2016 NALS
Looking ahead to the Leaders’ Summit in Canada in June, we believe that the time is right for Canada, the United States, and Mexico to build on our efforts and embrace a bold North American agenda. We recommend actions in five areas: (1) trade agreements; (2) borders; (3) regulatory cooperation; (4) energy and the environment; and (5) cybersecurity.
Trade and trade agreements have helped drive economic growth and jobs in each of our three countries for many years. Today, the North American trade architecture is now more than 20 years old. The Trans-Pacific Partnership (TPP), in which our three countries are participating, offers a vital opportunity to further expand our economic ties, modernize the rules for trade between our countries and with the other TPP countries, and set high standards to help shape the global marketplace. The TPP is crucially important to the global economy and our future shared prosperity. Our governments and the other TPP countries signed the TPP on February 4, 2016. We urge each TPP country to move expeditiously to approve and fully implement this key agreement.
The efficiency of North America’s border processes and infrastructure is crucial to its global competitiveness. While the U.S.-Canada and U.S.-Mexico borders face different challenges and have varied needs, each would benefit from greater investments and a robust sharing of best practices.
To enhance both efficiency and security at our shared borders, North America’s governments should build an enhanced partnership with the private sector in our three countries. This would be based on a foundation of data-driven traceability of goods in the supply chain and robust information sharing in exchange for much more substantial benefits for “trusted traders.”
Over the past few decades, we have not adequately invested in border-related infrastructure relative to the needs in our countries. In our view, our three governments should encourage private sector investments in border infrastructure to help fill this gap. Such infrastructure includes enhanced and expanded land and rail crossings, ports, roads, bridges and other means to facilitate and expedite the legitimate movement of goods and people from one country to another. Given the complexities of cross-border projects and the many laws and regulations enforced at our borders, the three governments should appoint a trilateral panel of border and finance experts to work through the details of how to make this happen.
Governments should also focus on identifying ways to improve the legitimate movement of travelers, especially business personnel, between our three countries. The U.S. Department of Homeland Security is piloting a “Known Employer Program.” The Governments of Canada and Mexico should similarly experiment. In addition, we recommend that the three governments look at how to further use their respective trusted traveler programs (e.g. NEXUS and Sentri) as a platform to facilitate the legitimate movement of business travelers across our three borders.
The Canada-U.S. and Mexico-U.S. regulatory cooperation processes are entirely separate from each other. These initiatives have had modest success and the governments should commit to accelerating progress.
Separately, we suggest that the three countries explore avenues for trilateral regulatory cooperation as much as possible. While this is not an easy process and not all areas of regulation would benefit from this approach, the governments should pick a few areas, perhaps starting in the highly integrated auto sector, and experiment with how to prevent or minimize unnecessary differences in their respective regulatory requirements.
Canada and Mexico should follow the lead of the United States and issue their own equivalents of U.S. Executive Order 13609 of May 2012 on “Promoting International Regulatory Cooperation.” Among other things, this Order mandates the U.S. Government to look at regulations through the lens of their impact on international trade and investment.
Finally, all three countries should commit to the adoption of licensing and permitting best practices. Expeditious, predictable and less burdensome permitting processes are an essential component of helping secure the benefits of increased trade between our countries.
Energy and Environment
We are keenly aware of the unprecedented opportunity to sustain a North American energy renaissance with continued responsible development that addresses our shared environmental challenges. North America can be a model of sound policy that delivers reliable and competitively priced energy, while also stimulating the development of lower-carbon technologies that the world will need.
We are pleased to see that North American energy ministers have laid out a strong and effective mutual action plan. We note in particular the emphasis on:
- Energy data and mapping;
- Best practices in the development of unconventional oil and natural gas;
- Cooperation on promising technologies – e.g. carbon capture and storage, electric vehicles, low carbon electricity grids;
- Sharing of information on each country’s clean energy research and development through the “Mission Innovation” Initiative;
- Harmonization of standards/requirements in key areas, including energy efficiency standards for appliances, vehicles and buildings
We also were pleased to see that at their February 12 meeting, North American energy ministers committed to regular reporting and assessment of progress on the commitments noted above. They also undertook to seek engagement with the private sector on specific activities. While this is an encouraging sign, as noted above, we would prefer a more formal consultative mechanism that allows leading business actors to help shape the overall strategy.
Going forward, our three countries need to streamline the approval process for cross-border energy infrastructure. Enhancing transportation and transmission options will allow us to make the most economic use of our shared resources and expand access to lower-carbon energy.
We also note the decision of Ministers to develop a “North American climate action plan” and look forward to working with our respective governments as they develop details and deliverables related to this plan.
The world is changing. As it does, North America’s governments and businesses need to address emerging challenges. One of these is cybersecurity. Given the interconnection of economies and our critical infrastructure, we need a more robust approach to addressing cross-border risks and challenges in this area. Importantly, all three countries recently initiated trilateral discussions on cybersecurity in the context of the North American Leaders Summit. We are encouraged by these discussions and recommend a focus in the following priorities as this process proceeds:
- Integrating a multi-stakeholder approach into ongoing discussions;
- Establishing a legally- and privacy-protected cybersecurity threat information sharing framework to increase the exchange of relevant data and analytics among companies and all relevant government agencies, including those in the security, law enforcement, intelligence, diplomatic, and military domains. In advancing this work, the countries should build on existing mechanisms, such as the U.S. Information Sharing and Analysis Centers and the recently launched Canadian Cyber Threat Exchange;
- Coordinating approaches to protecting shared critical infrastructure. These should be voluntary, flexible and agile enough to keep pace with growing cybersecurity threats;
- Establishing arrangements and cooperation mechanisms among law enforcement agencies to combat cross-border cybercrime; and
- Adopting cybersecurity norms that are consistent with agreements in other regions of the world, including those within the United Nations Group of Governmental Experts and U.S. bilateral agreements with Japan, India, and the United Kingdom.
In conclusion, North America has vast economic potential. As leaders of business organizations in Canada, Mexico and the United States, we want to partner with our three governments to deepen our economic ties and enhance our international competitiveness.
John P. Manley
President and CEO
Business Council of Canada
Alejandro Ramírez Magaña