Good Neighbours

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Good Neighbours? Trade and Canada/US Relations
Professor Grant E. Isaac, PhD Director, Hanlon
Centre for International Business Studies Dean,
Edwards School of Business University of
Saskatchewan
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• Canada/US commercial relations have remained a
  terrific example of GATT-type trade
• shallow economic integration
• regulatory competition
• But, can this continue for the prosperity of
  both?
• Implications for trade policy and US market
  strategies?

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• Two forces challenge the relationship
• emergence of regulatory barriers to trade
• fundamental change in US trade policy
• (as a result of the events of September 11,
  2001)

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• Regulatory barriers to trade
• Consequence of a maturing relationship
• 3 quick examples include
• Ban on Canadian Beef
• Softwood Lumber
• Wheat/State-Trading Enterprises

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• 2. Fundamental change in US trade policy
• (as a result of September 11, 2001)
• Shift away from PND
• approved once, always, everywhere
• Shift towards the PAIA or PIC Trade Act 2002
• approved once
• Why does this matter?
• Trade becomes a state-state function
• From trade rules . to . domestic discretion
• Add to this, the worry about the domestic lobby

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• Trade Policy Implications
• Regulatory Barriers to trade
• Time for greater coordination
• 63 states, provinces and territories
• Customs union, common market, economic union,
  political union
• Prepare for the domestic lobby
• 2. US national security focus
• Security and Prosperity Partnership makes sense

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• Trade Strategy Implications
• increased delays (procedural and volume)
• increased restrictions on
• novel products
• food products/risky products
• increased bans
• secure your supply chains
• preferred supplier status
• vertical integration, contract relationships,
  FDI
• greater industry organization representation
• also to build confidence in trade as a
  commercial function