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Leveling the cross-border playing field

Canada and the U.S. hope new trade action plan will iron out border headaches for businesses


December 8, 2011
by The Canadian Press

OTTAWA—Trade regulations between Canada and the U.S. have often been described as a “tyranny of small differences.”

But a new Action Plan on Regulatory Co-operation hopes to finally do away with those supposed small difference—which happen to cost Canada $16 billion at the border a year.

That’s one per cent of Canada’s GDP.

The pact lays out 29 initiatives attempting to streamline operations for businesses on both sides of the border, in areas such as food, the auto industry, personal health products and the environment.

For a decade, businesses have been lobbying for an end to the distinct regulatory requirements on both sides of the border, which they say have cut into the two-way trade between the Canada and the U.S. that now stands at $500 billion year.

“No loss of sovereignty is contemplated by either of our governments,” said Prime Minister Stephen Harper in Washington.  “However, every rule needs a reason.”

The plan proposes to align inspection and certification for meat and poultry and reduce red tape.

“For example, in the U.S., terms such as ‘peameal bacon’, ‘chicken tenderloin’ and ‘flatiron steak’ are widely used, however these terms are not permitted in Canada,” says a government backgrounder.

“Such variations, even when slight, create costly problems for Canadian and U.S. importers and exporters,” which lowers competitiveness and confuses consumers.

In the North American auto industry, cars may look the same, but slight differences in specifications create headaches for manufacturers on either side of the border.

Production lines in the same plants have to produce two versions of the same vehicle depending on the target markets.

The plan would also eliminate regulatory differences in rail transport to increase the flow of rail containers between the two countries.

On the environmental front, greater technical co-operation is being promised on monitoring emissions from new cars and light trucks built between 2017 and 2025.

The two countries will also expand the 1991 Canada-U.S. Air Quality Agreement to seek ways to reduce greenhouse-gas emissions from vehicles.

These are the sorts of steps that businesses on both sides of the border have been clamouring after more than a decade.