The Action Plan on Regulatory Co-operation announced Dec. 7 aims to do away with the “tyranny of small differences” between Canada and US trade regulations.
OTTAWA: The Action Plan on Regulatory Co-operation announced Dec. 7 aims to do away with the “tyranny of small differences” between Canada and US trade regulations.
The pact lays out 29 initiatives that attempt 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.
The government says inefficiencies at the border cost Canada $16 billion a year, or 1% of GDP. For a decade, businesses have been lobbying for an end to the distinct regulatory requirements on both sides of the border, which they say has cut into the two-way trade between the Canada and the US 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 in announcing the plan. “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 US, 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.
In the North American auto industry, cars may look the same, but small differences in the specifications for frames, for example, creates added headaches for manufacturers. Production lines in the same plants have to produce two versions of the same vehicle depending on where they are to be sold.
The plan would also get rid of regulatory differences in rail transport to increase the flow of rail containers between the two countries.
In health care, the deal proposes a new electronic system that would allow applications for approvals to be filed to Health Canada and the US Food and Drug Administration.
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-US Air Quality Agreement to seek ways to reduce greenhouse-gas emissions from vehicles.
Canadian Manufacturers & Exporters (CME) said fewer border stops and smarter regulations could save Canadian companies between $15 billion and $30 billion annually, and will dramatically reduce the wall of data separating the world’s two largest trading partners.
“This announcement is not about a common border; it is about an integrated economy and our shared vision for good jobs, increased investment and a higher standard of living,” said Jayson Myers, CME’s president and CEO in a statement.
The CME noted for automobile manufacturers alone, current border realities add between $400 and $700 in production expense per vehicle.
But Myers warned these are only potential savings and that much more work must be done to ensure the plan is fully implemented.
“The economic benefits of this strategy are more significant than most free trade agreements, and should signal that manufacturing is alive and well in North America. Complacency, however, is not an option. Government has laid the framework and now businesses must lead the way in turning a good idea into action and bottom-line results.”
Myers was to meet with Harper Dec. 8 to discuss next steps for implementing the plan.
The Ottawa-based Canadian Council of Chief Executives (CCCE) representing 150 CEOs and leading entrepreneurs from all major sectors, also endorses the plan.
John Manley, former federal Liberal cabinet minister and the group’s president and CEO, said the plan will significantly improve the economic environment in both countries, promoting job creation and encouraging new business investment. He said it also creates a framework for further progress in border management and enhanced regulatory efficiency.
Maude Barlow, chair of the Council of Canadians, was critical of the government for not consulting directly with groups concerned about the environment, health and safety standards, privacy and sovereignty.
“We are very concerned that the harmonization of goods and services at the border will lower health, food safety and environmental standards on both sides of the border, given that it is all being supervised and done on behalf of the business community,” she said.
“It is shameful that only one sector is driving this agenda.”
Click here for information about the Action Plan.
© 2011 The Canadian Press, Files from PLANT