NASCO Report Ottawa Visit April 5-7, 2016

NASCO- North American Strategy for Competitiveness – visited Ottawa as part of their annual outreach visits to the three North American capitals. Led by NASCO President Tiffany Melvin and Director of Membership & Events Rachel Connell, they met with the US and Mexican Ambassadors, as well as senior officials at PCO and GAC. The delegation included senior government representatives from Mexico, the provinces of Manitoba, Ontario and Saskatchewan, as well as private sector members from around the USA.

Given the timing of the approaching North American Leaders’ Summit, the visit was effective in generating practical suggestions for the leaders to discuss.

The US Embassy used its convening power to bring government departments and agencies into a roundtable discussion that included updates on preclearance (legislation under consideration in the Congress and anticipated in the Canadian parliament) as well as the 12 point North American Competiveness Workplan initiated by US Secretary Pritzker, Mexican Secretary of Economy Guajardo and Trade Minister Ed Fast (2015)

Industry associations - Claire Citeau CAFTA, Monique Moreau CFIB, Stephen Brooks CMCC, Michael Guilo Railway Association, Jennifer Fox, Canadian Trucking Alliance – also met with NASCO at the Business Council of Canada.

Ambassador Heyman said planning for the North American Leaders summit was looking at five baskets:  Climate, Energy and the Environment building on the ongoing work of the Three Energy Ministers and now the Environment Ministers;  Competitiveness and Trade: including the TPP, an Obama administration priority, the three nations’ negotiations to establish or update their trade agreements with the EU, trade with the rest of the Americas (ex the Pacific Alliance, Brazil)  Border: The work that is going on mostly bilaterally ie. Canada-USA and USA-Mexico While arguably trade, it deserves its own basket and Ambassador Heyman said this was the main takeaway from his initial cross- country visits.  North American issues related to disaster management and pandemics (notably Zika virus but previously SARS), and challenges within the Americas including Mexico’s Central American neighbours and cooperation around drug and people trafficking, and problems in Haiti, Venezuela, Brazil.  Global Issues: including terrorism, pandemics, relations with China as well as upcoming G8/G20 and other leaders meetings.

Most of the NASCO discussion focused on making the border more efficient, reflecting the baskets named by Ambassador Heyman also included trade, climate and other North American issues. There was general agreement that we should try to synchronize or at least keep informed of the Canada-US and US-Mexico border and regulatory cooperation work

There was also discussion about improving the NALS process to incorporate the views of other orders of government, business and civil society leading to a series of suggestions, recommendations and reflections.

1. Border:  Instead of focussing on pre-inspection or pre-clearance at one or two ports, why not direct attention to a mandate for RFID that would see every single truck whether CA-US bound moving by 1 min 30 seconds faster. The Canadian Trucking Association underlined the impact this would have when a truck crosses the northern border every 2 seconds: imagine the time savings at Ambassador Bridge alone where roughly 11,000 trucks cross every day.  Addressing the non-tariff barriers, especially important for the $35-bn Great Lakes - Seaway shipping industry in the context of the uneven application of ballast water regulations  Piloting freight route optimization algorithm technology at border points. Similar freight optimization pilots are currently underway in the USA to improve drayage, port congestion and freight movement through congested construction zones.  Using existing administrative capacity to increase the list of professions on the NAFTA TN approved list.  Piloting cross-border Foreign Trade Zones so as to expedite movement of goods  Tripartite working group to report back in 100 days (so as to allow action during the life of the Obama Administration) on improving corridors. This would include mapping needed infrastructure and how to better move goods and people between modes, especially train and truck.  Create border community action groups at border crossings, big and small, to work with CBP and CBSA on practical solutions as to how to expedite border passage. Pilot them locally and then share best practices.  Follow through on all the unfinished business dating back to ‘Smart Border’ particularly as it relates to inter- agency collaboration within member governments ex CBP working with the US Department of Agriculture. There is a belief that government relishes the ‘big vision’ statements but buries the stuff that doesn't’ work ex preclearance and ‘inspected once, cleared twice’ at Prince Rupert. The rail and trucking operators were scathing in relating their experience about trains stopped at Portal or Rainy River and then cars sent back to the port by US officials. For example, how do we get the US Department of Agriculture to work with Canadian Food Inspection Agency on wood pallets  Raise the value on the Canadian side for low value shipments. This would do a lot to increase small business exports. For now it is daunting. The CFIB fields an average of 26 calls a day from members whose shipments are trapped in customs and they can’t figure out what is the problem. This deters any desire to export.

2. Trade and competiveness:  Infrastructure: There was general agreement that we need a North American Infrastructure Mechanism. Many suggested evolving the current North American Development Bank through Canadian participation. P3 partnerships are the way to go but there must be an easy mechanism for capital to identify opportunities and then participate.  North American Trade Committees: Mirroring the existing steel committee should we not consider similar committees for sectors like autos and pharmaceuticals. They would have been beneficial during the recent TPP talks and have application given supply chain and integrated production sharing.  Presidential permitting – the Americans recognize that the process of permitting for bridges (ex the five years it took for the Gordie Howe Bridge to be approved) and pipelines (KXL) does not work  Managing Skills Development: NASCO is working on a a tri-national workforce pilot using the Manufacturing Skill Standards Council (MSSC) certification system that should help efforts to create a portable, North American workforce credential that has obvious positive implications for the logistics of supply chain management.  Competitiveness: The Bush Institute Competitive Scorecard grades business, investment, trade, health and education, legal and property rights, and environments demonstrating why North American cooperation is so important and what areas we need to work on. 

3.Energy, environment and climate:

 Water management: Manitoba pointed to lessons learned through the Great Lakes agreements and the International Joint Commission would lend themselves to the US-Mexico border. With the Columbia River agreement up for renewal management of water is back on the front-burner.  Disaster management/emergency preparedness: There is a lot of action taking place regionally and at the state- province level especially as it relates to flooding and fires and pest control, which should be recognized and supported at the national level.

4. Greater involvement in the NALS process of the other orders of government, business and civil society with the following recommendations:

 Creation of a NALS Secretariat: it could be permanent or revolving but it would be useful to have sherpas designated at each meeting so that business and civil society groups have a point of contact between meetings.  Province-State Problem-Solving: This occurs behind the headlines – governors and premiers attend each others’ meetings, there are regional meetings of state and provincial legislators and occasionally trilateral sessions. While the recent trilateral conference hosted by Colorado Governor John Hickenlooper did not attract the critical mass (only one Canadian premier attended), it is worth repeating.  On climate, and pivoting off the Vancouver Declaration, the explicit recognition that provinces and territories have a vital role in identifying national solutions to climate. California pioneered the Western Climate Initiative on cap-and-trade as well as the now Canada- US tailpipe emissions standards for cars and trucks. Relevant recent examples of significant sub-national consultations on energy include joint work by Western Premiers and Western US Governors and Eastern Premiers and New England Governors. There is also a specific provision regarding provincial and territorial input/consultation on the Trilateral Energy Ministerial work taking place under ministers Carr, Moniz and Coldwell.  An event for premiers and governors (even if just the chairs of the regional conferences and current chair of the Democrat and Republican governors) with key Mexican governors to an event around the trilateral conference to underline the complicity of the different orders of government in trilateral cooperation.  Going forward add a "subnational" Premiers'/Governors' component to the NALS, with all Premiers invited (because it's in Canada this year) plus Exec members from the National Governors Association, the Mexican Governors' group and perhaps some of the regional groups like the Western Governors Assocaition, New England, Great Lakes governors.  Intensification of Existing Consultative Mechanisms: Business stakeholders were emphatic about the need for stakeholder consultations to accompany government-to-government consultations, especially on regulatory cooperation, and that using existing mechanisms and "convening grassroots groups" like NASCO and others is preferable to inventing new mechanisms.  For sectoral and regional meetings of premiers and governors use existing organizations, such as NASCO, to convene these meetings.

5. Other North American issues some of the suggestions included:

 Higher Education Cooperation: Governor General David Johnston has made a series of US missions around innovation. How do we institutionalize the work that he and his accompanying delegations are achieving?  Public Health Cooperation: There is good coordination and cooperation between the Atlanta and Winnipeg centers for disease control with solid accomplishments around SARS and Ebola but attention from leaders’ would give a lift to forthcoming work on, for example, the Zika virus. Their joint work on vaccines also has a commercial application.  Indigenous Relations: There is much we can learn from one another Mexico-USA-Canada.

NASCO began twenty-two years ago as a corridor coalition supporting infrastructure and investment along the Mid- Continent Corridor from Manitoba to central Mexico but now is the only tri-national, member-based continental organization focusing on North American logistics and supply chains, skilled workforce and energy and the environment.

What makes NASCO different from other trilaterally-minded associations is that it focuses on finding practical solutions to local problems – i.e. how to improve drayage at a particular border, or how to train customs brokers so they can better expedite freight. They are based in Dallas, which from a Canadian perspective is an advantage because, like PNWER (based in Seattle) it means its American leadership can actually get through to US leadership and bring it to the trilateral table. A May13 ‘All Trade is Personal’ Day is planned for Capitol Hill.

Given the current US climate, when voices favoring trade are in eclipse, NASCO is useful and important, in part, because its membership is not Wall Street but Main Street. This is also its weakness – it is not yet as well connected as Washington based organizations but it does identify the real problems of border passage and skilled workforce challenges, among other issues, and aims to come up with practical fixes, if not solutions.