Report

DELEGATION MEMBERS AND STAFF

From 30 September 2018 to2 October 2018, Senator Michael L. MacDonald, Co-Chair, and Mr. Brian Masse, M.P., Vice-Chair, represented the Canadian Section of the Canada–United States Inter-Parliamentary Group (IPG) at the fall meeting of the Canadian/American Border Trade Alliance (Can/Am BTA) in Washington, D.C. They were accompanied by Ms. June Dewetering, the Canadian Section’s senior advisor.

THE EVENT

The Can/Am BTA holds two meetings each year: in the spring in Ottawa and in the fall in Washington, D.C. As a coalition of businesses, public-sector organizations and individuals with an interest in bilateral trade and tourism, its mission is to maximize commercial activity and ensure continued growth in cross-border trade, as well as efficient and productive border-crossing capabilities.

Attendees at the event included private-sector representatives involved in a number of tourism, transportation and trade-related activities, as well as representatives of a variety of U.S. and Canadian federal departments and the Canadian Embassy in Washington.

DELEGATION OBJECTIVES FOR THE EVENT

The IPG’s Canadian Section has a long association with the Can/Am BTA, and members of the Canadian Section typically attend both its fall and spring meetings. Given the Can/Am BTA’s focus, attendance at the meetings provides members of the Canadian Section with an important opportunity to gain insight about trade- and tourism-related problems being experienced by businesses and individuals, as well as about efforts and actions by governments in both countries to address these problems.

As well, attendance at the BTA’s meetings enables members of the Canadian Section to interact with, and learn from, private- and public-sector organizations and individuals who deal with Canada–U.S. border issues on a daily basis. It also provides the Canadian Section with an opportunity to inform others about the range of actions taken by it in respect of shared bilateral goals, especially through the invitation that is given to the Canadian Senate and House of Commons IPG Co-Chairs and/or Vice-Chairs to make remarks at the meeting. In speaking to attendees at the BTA’s 2018 fall meeting, Senator MacDonald and Mr. Masse spoke to attendees about current areas of bilateral cooperation in three areas: trade and investment; security and defence; and energy and the environment.

ACTIVITIES DURING THE EVENT

Sessions with the following titles were held:

• Customs and Border Protection: Trade Relations, Expediting Low-Risk, Beyond the Border CBP Priorities and Initiatives
• Beyond Preclearance Initiative: Overview and Update
• NAFTA Insight and Perspective: Update and Insights
• Canada/U.S. Inter-Parliamentary Group: Canada/U.S. Relations and Cooperation Activities
• The Canadian Perspective
• Customs and Border Protection – Overview of New CBP Approaches, Biometric Technology and Land Port Initiatives, and Green Lane Rolling Stop Trucks, Unified Cargo Processing, etc.
• View from the Hill and White House on Canada/U.S.
• Homeland Security: View of U.S./Canada
• U.S./Canada Border – The Reality: Manage What You Can Control Then Think Outside the Box
• Insights and Opportunities: Fireside Chat with Can/Am BTA Senior Advisory Board
• Federal Highway Administration.

This report summarizes the main points made during the presentations.

CUSTOMS AND BORDER PROTECTION: TRADE RELATIONS, EXPEDITING LOW-RISK, BEYOND THE BORDER CBP PRIORITIES AND INITIATIVES

Kevin McAleenan, U.S. Department of Homeland Security

• The 30 September 2018 announcement about the United States–Mexico–Canada agreement (USMCA) is significant; given its “age,” the North American Free Trade Agreement (NAFTA) required modernization; some of the USMCA’s provisions – including e-commerce, intellectual property rights, rules of origin, and anti-dumping and countervailing duties.– have U.S. border implications, and thereby consequences for the U.S. Department of Homeland Security (DHS).
• In June 2018, DHS released an updated Northern Border Strategy that has the following three pillars:
  • enhance border security operations, with a focus on improved sharing of information and domain awareness, and integrated operations;
  • facilitate and safeguard lawful trade and travel, with a focus on enhanced inspection and screening in a timely manner, enforcement of a fair trade environment and improved border infrastructure; and
  • promote cross-border resilience, with a focus on support for response and recovery capabilities among U.S. federal, state, local and tribal entities and Canadian partners.

• Adoption of facial recognition for drivers would mean that trucks would no longer have to stop as they cross a shared border.
• Discussions are occurring in the United States and Canada regarding a pilot project for unified cargo processing and shared facilities on either side of the common border.

BEYOND PRECLEARANCE INITIATIVE: OVERVIEW AND UPDATE

Gerry Bruno,Vancouver Airport Authority

• There is a need to continue the Beyond the Border’s (BTB’s) “unfinished business,” and to streamline further the free flow of low-risk goods and travellers.
• Because the volume of goods and travellers crossing the Canada–U.S. border is expected to rise in the future, the use of technology and risk-based approaches should be maximized, as appropriate.
• With enhanced technology and the collection of information, the “population” of goods and travellers where the risk is either unknown or high is diminishing; in particular, most travellers have a “history” that is known and, consequently, it should be easier for them to cross a border.
• The future may involve a true probability-based model that reflects a traveller’s history, with biometrics leading to free movement across a border for all and only random checks undertaken.
• Because cost recovery regarding border processes is not a sustainable model for the long term, a private sector–public sector investment model should be used, with a strong “return on investment” for both sectors.
• For the private sector, a “return on investment” could be capital deferment, faster processing or a better customer experience; for the public sector, it could be reduced staffing or future avoidance of costs.

Solomon Wong, InterVISTAS

• A new vision for the Canada–U.S. border should focus on three elements: predictability; security; and integration.
• Technological “game changers” include the following:
  • next-generation biometrics;
  • remote and multi-use screening;
  • drone networks;
  • blockchain and track/trade;
  • artificial intelligence/machine learning;
  • mobile smartphones;
  • autonomous vehicles; and
  • enterprise cloud services.

• Travel has evolved over time, including in the following ways:
  • 1971: primary booths;
  • 2006–2017: border kiosks and mobile apps; and
  • 2018: biometrics.

• Efforts should be directed to “moving things” as far away from the Canada–U.S. border as possible and to “streaming” vehicles by risk level as early as possible.
• Key themes that should be considered as “beyond preclearance” initiatives are envisioned include the following:
  • Adopt a remote clearance approach.
  • Screen once and accept multiple times.
  • “Harness” big data while protecting individual privacy and commercial sensitivities.

NAFTA INSIGHT AND PERSPECTIVE: UPDATE AND INSIGHTS

Dan Ujczo, Dickinson Wright PLLC

• With the 30 September 2018 announcement about the USMCA, the three countries may now focus on approving the agreement in their legislative bodies; for a variety of reasons, legislative approval may not be easy in any of them.
• From the U.S. perspective, the focus in 2019 is likely to be domestic issues; as well, the USMCA is not a “typical” free trade agreement, which may lead to difficulties in securing adequate Congressional support.
• In the context of the USMCA, the United States achieved virtually all of its stated negotiating objectives, thereby providing President Donald Trump with a “trade win”; that said, Canada “won” because Chapter 19 and the cultural exemptions were retained, Mexico “won” regarding seasonal workers, and both of these countries “won” because they “survived” the NAFTA negotiations.
• According to some analyses, in “moving” from NAFTA to the USMCA, Canada and Mexico made the most significant concessions in relation to intellectual property; there could be implications for Canada’s health care sector.
• From the U.S. perspective, the elements of the USMCA that address digital trade, customs and trade facilitation, and sanitary and phytosanitary measures, among others, might be viewed as modernizations of NAFTA; the provisions that address trade in automotive and dairy products might be viewed as “rebalancing” of the relationship.
• On balance, the USMCA may be viewed as NAFTA+, with a number of provisions that will benefit the United States, Mexico and Canada; for example, the chapters on digital trade, anti-corruption and trade facilitation, among others, may be beneficial for all three countries.
• It is possible that President Trump may withdraw the United States from NAFTA for two reasons: two agreements among the three NAFTA countries should not exist simultaneously; and the U.S. Congress should not have the option of rejecting the USMCA and “retaining” NAFTA.
• The agreement in principle reached by the United States and Mexico on 31 August 2018 started a “90-day clock”; there will now be 60 days – until 30 November 2018 – in which to review the text of the USMCA, and the U.S. International Trade Commission has 105 days within which to submit a report.
• In the United States, a number of procedures and requirements – often without fixed dates for completion – can exist regarding an agreement, including the following:
  • review of the text;
  • an implementing bill;
  • a statement of administrative action;
  • an environmental review;
  • an employment impact review; and
  • a plan for implementation.

• It is unlikely that the current U.S. Congress will vote on the USMCA; instead, a vote in late spring or early summer 2019 is more likely.
• In a number of respects, including its structure, the USMCA “mirrors” the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

CANADA/U.S. INTER-PARLIAMENTARY GROUP: CANADA/U.S. RELATIONS AND COOPERATION ACTIVITIES

Senator Michael L. MacDonald,Senate of Canada and Canada–United States Inter-Parliamentary Group

• For almost 60 years, Canadian and U.S. federal legislators participating in the Canada–United States IPG have had four basic goals:
  • find points of convergence in respective national policies;
  • initiate dialogue on points of divergence;
  • encourage the exchange of information; and
  • promote better understanding on shared issues of concern.

• The Canada–United States IPG’s Canadian Section pursues these goals primarily through:
  • an annual meeting with Congressional counterparts that alternates between the capital cities of Canada and the United States;
  • annual or more frequent meetings on Capitol Hill; and
  • meetings of governors, of state legislators, and of the private sector and the public sector.

• Realistically, any bilateral partnership having the depth and scope of the Canada–U.S. relationship is likely to have both good times and bad, and perhaps to experience both at the same time, depending on the issue.
• Canada and the United States seem to be working well together in some areas, while in other areas the two countries are experiencing challenges; that said, with a great deal of time and energy being spent on the “down side” of the bilateral relationship, there is an opportunity also to spend time and energy focusing on bilateral “good news.”
• One area in the Canada–U.S. relationship that constitutes a “good news story,” despite some current challenges, is the trade and investment relationship.
• Until 30 September 2018, the “anchor” for the Canada–U.S. trade and investment relationship was NAFTA, a model that has been copied at various locations and times, and to varying extents, throughout the world; with an announcement on that day, the three NAFTA countries agreed that negotiations had concluded for the USMCA.
• On balance, NAFTA provided benefits for Canada, the United States and Mexico in terms of economic growth, supply chain efficiencies and job creation.
• In 2017, the value of Canada–U.S. trade was almost US$674 billion, or an average of $1.3 million in bilateral goods and services traded every minute of every day; in that year, trilateral NAFTA trade exceeded US$1 trillion, which is a more than threefold increase since 1993, and investment has increased substantially too.
• In 2017, the United States continued to be Canada’s largest merchandise and services trade partner, an estimated 9 million U.S. jobs depend on trade and investment with Canada, and Canada is the primary foreign export market for most of the U.S. states.
• Within the world’s largest economic zone, Canada, the United States and Mexico build things together, and the three countries sell things to each other and to other countries throughout the world; together, the three countries account for more than 25% of the world’s gross domestic product, have a market valued at US$22 trillion and comprise more than 480 million consumers.
• One key to integrated supply chains, and to economic growth in Canada and the United States, is the ability to move goods and people – whether business people or tourists – across a shared border that is as seamless as possible, while ensuring an appropriate level of security.
• Canada and the United States have an “architecture” designed to ensure a shared border that functions in a way that meets the needs of both countries, and their businesses and travellers.
• Canada–U.S. collaborative efforts regarding the shared border were an important focus following the terrorist attacks of 11 September 2001, beginning with the Smart Border Action Plan and, since then, such initiatives as BTB; these efforts continue to be a priority, with – for example – the February 2017 affirmation by Prime Minister Justin Trudeau and President Trump of the importance of a secure shared border, bilateral cooperation on borders and regulations, and regulatory cooperation.
• With the Integrated Border Enforcement Teams (IBETs), a number of federal entities in Canada and the United States – the Royal Canadian Mounted Police, the Canada Border Services Agency (CBSA), U.S. Customs and Border Protection (CBP), U.S. Immigration and Customs Enforcement and the U.S. Coast Guard – work together to identify, investigate and interdict persons, organizations and goods that threaten the national security of one or both of the countries, or that are involved in organized criminal activity.
• Both Canada and the United States are members of the World Trade Organization and of the G20, the latter of which has – since the most recent global recession – become an increasingly important economic policy forum.
• Notwithstanding periodic challenges, the Canada–U.S. trade and investment cooperation is fundamentally strong.

Brian Masse, M.P., Canadian House of Commons and Canada–United States Inter-Parliamentary Group

• In addition to cooperation regarding trade and investment, Canada and the United States collaborate on North American and international defence and security issues, with a number of mechanisms that form the “architecture” that provides a foundation for this cooperation.
• The United States is Canada’s closest security partner and defence ally.
• The Canada–U.S. defence partnership is both long-standing and multidimensional, and the two countries have numerous bilateral institutions, agreements and arrangements, as well as extensive military-to-military cooperation, including through joint training and exercises, and collaboration in a number of policy areas, including continental defence, border security, the Arctic, the security of critical infrastructure, cybersecurity and information sharing.
• A key and perhaps the most visible example of Canada–U.S. cooperation regarding defence and security is the North American Aerospace Defense Command (NORAD), which is celebrating its 60th anniversary this year; NORAD has a U.S. commander, a Canadian deputy commander and a unified staff, and the commander is appointed by – and responsible to – both the Prime Minister of Canada and the President of the United States.
• Other examples of Canada–U.S. bilateral and multilateral defence and security collaboration exist, including the following:
  • the Permanent Joint Board on Defense, which has met continuously since 1940, is the oldest and most significant bilateral defence forum shared by Canada and the United States, and has examined virtually every important joint defence measure undertaken since 1945;
  • the Military Cooperation Committee, which was established in 1946 and is the primary strategic link between Canadian and U.S. military staffs;
  • the Tri-Command Framework, which brings together the Canadian Joint Operations Command, NORAD and U.S. Northern Command;
  • the North Atlantic Treaty Organization (NATO), of which Canada and the United States are both founding members and its sole non-European countries; and
  • the Global Coalition against Daesh, which is led by the United States and involves Canadian participation through Operation IMPACT.

• Canada and the United States cooperate on energy and environmental issues through an established “architecture” of institutions, agreements and arrangements.
• Energy cooperation between and among Canada, the United States and Mexico is long-standing, and has evolved over time; the continent’s energy systems are highly integrated, and are supported by critical energy infrastructure, including pipelines and electricity transmission lines.
• From a Canada–U.S. perspective, in February 2017, Prime Minister Trudeau and President Trump underscored their shared goals for energy security, a robust and secure energy grid, and strong and resilient energy infrastructure.  
• Current areas of Canada–U.S. energy involvement include the ENERGY STAR Program, although an exchange of letters between Natural Resources Canada and the U.S. Environmental Protection Agency expires in March 2019 and the 2018 White House budget blueprint recommended that the program be defunded.
• Canada and the United States have a regulatory partnership statement and annual work plan designed both to improve alignment between the two countries’ energy efficiency standards and test procedures for energy-using equipment, as well as to develop standards and the sharing of best practices for the use of natural gas as a transportation fuel.
• Regarding the environment, Canada, the United States and Mexico have been cooperating through the Commission for Environmental Cooperation.
• From a Canada–U.S. perspective, perhaps one of the most notable examples of bilateral environmental cooperation is the International Joint Commission (IJC).
• Through the 1909 Boundary Waters Treaty, Canada and the United States created the IJC more than a century ago; this treaty, which is still relevant today, provides principles for the two countries to follow in using shared waters, including the Great Lakes.
• Canada and the United States have more than 25 bilateral agreements regarding environmental cooperation, including in relation to fish stocks that migrate between the two countries, air quality, wildlife and parks.
• Until President Trump’s withdrawal of the United States from the Paris Agreement on climate change, Canada and the United States were both signatories to this United Nations framework.
• There are additional fora in which Canada and the United States cooperate internationally, including the following:
  • the United Nations;
  • the G7;
  • the Organization for Security and Co-operation in Europe;
  • the Organisation for Economic Co-operation and Development;
  • the Financial Action Task Force;
  • the Organization of American States;
  • the Asia-Pacific Economic Cooperation forum; and
  • the World Health Organization.

• While the future is uncertain, the relationship between Canada and the United States need not be; decision makers in the two countries should work together for joint benefit and shared prosperity.

THE CANADIAN PERSPECTIVE

Martin Loken, Global Affairs Canada

• The Canada–U.S. relationship is “deep” on many levels, including because of common interests and values, as well as a shared focus on security and prosperity; the relationship goes “far beyond economics.”
• A threat to Canada or the United States is, simultaneously, a threat to the other country; each is fortunate to have the other as a neighbour.
• Canada and the United States have a number of initiatives designed to ensure the safety of the shared border, including Shiprider, IBETs, pre-clearance, and the sharing of visa, immigration and other information.
• Canada is a partner with the United States in NORAD, the Global Coalition against Daesh and NATO, among other institutions and missions.
• Canada and the United States share common objectives in seeking to eradicate the opioid crisis that exists in both countries.
• More than 9 million U.S. jobs depend on trade and investment with Canada, and goods and services valued at $2 billion cross the shared border daily, as do an estimated 400,000 individuals.
• Canada and the United States need the right “frameworks” to govern their trade and investment relationship; noteworthy in this respect is the 30 September 2018 announcement about the USMCA, which will provide needed predictability and stability, as well as support a “healthy” and integrated North American economy.
• The CBSA works closely with CBP in using risk-based approaches to ensure the existence of a secure border that is open to trade and travellers, while being closed to increasingly sophisticated threats.

CUSTOMS AND BORDER PROTECTION – OVERVIEW OF NEW CBP APPROACHES, BIOMETRIC TECHNOLOGY AND LAND PORT INITIATIVES, AND GREEN LANE ROLLING STOP TRUCKS, UNIFIED CARGO PROCESSING, ETC.

Colleen Manaher,U.S. Department of Homeland Security

• Progress is being made toward a world where travellers no longer need travel documents, security is transparent and international travel is stress-free.
• CBP is deploying full-scale facial recognition technology at a number of U.S. airports, and is evaluating opportunities for using this technology regarding cruises.
• “Air arrival facial recognition” enables travellers to be identified as they approach CBP officers without the need to scan passports and capture fingerprints; consequently, the officers can increase their focus on admissibility and enforcement.
• Some CBP offices are using CBP ROAM, which is a free mobile app that is transforming the processing of pleasure boaters and other low-risk populations remotely reporting their arrival in the United States.

Manuel Garza,U.S. Department of Homeland Security

• Advanced technologies are transforming U.S. border operations; in particular, they are relieving congestion and expediting trade, among other benefits.
• Non-intrusive inspection helps to maintain traffic velocity.
• There is an increased focus on PARE: pre-arrival readiness.
• Modernized user fee collection involves contactless and electronic payments; in some cases, the collection of cash payments is occurring in secondary inspection, which is a disincentive to use cash.

VIEW FROM THE HILL AND WHITE HOUSE ON CANADA/U.S.

Peter Friedmann, Lindsay Hart, LLP

• Usually, trade negotiations take “awhile,” which is a reality that the Trump Administration considers unacceptable.
• A vote in the U.S. Congress on the USMCA is likely to occur in 2019, and the outcome of the vote could depend on whether the Republicans or the Democrats are the majority in Congress.
• The U.S. midterm elections in November 2018 are likely to involve “a wave”; however, whether it will be a “red/Republican” wave or a “blue/Democrat” wave is unclear.

HOMELAND SECURITY: VIEW OF U.S./CANADA

Michael Dougherty,U.S. Department of Homeland Security

• E-commerce has “huge” potential, especially for developing countries; assuming that conditions in their country allow e-commerce to occur, such as infrastructure, access to computers, etc., people can earn income from their home.
• Technology is the “guiding force” underlying the growth in e-commerce, but some illicit activities are occurring.
• Canada is an “outstanding partner” for the United States in the context of activities undertaken by the World Customs Organization, including in relation to standards for e-commerce.
• The United States and Canada form the world’s largest bilateral trade and investment partnership, and ongoing collaboration is important.
• The USMCA is a comprehensive trilateral agreement that should strengthen North America as a “competitive marketplace.”
• Security threats are always evolving, and terrorist threats have metastasized and decentralized; the United States and Canada must continue to work together using risk-based approaches.
• In June 2018, DHS released a revised Northern Border Strategy.
• The United States’ northern border involves some challenging terrain, which gives rise to questions about the security that is needed and the security that is affordable.
• Biometrics for travel, such as facial recognition, enables “token-less” travel and “capitalizes” on traveller behaviour.
• An important goal is a “frictionless” experience from curb to gate.
• Radiofrequency identification (RFID) is revolutionizing trade and travel at the United States’ land borders.
• Regarding Canada’s legalization of cannabis, Canadians will be expected to respect U.S. laws; seizure, fines, apprehension and refusal of entry are possible.

U.S./CANADA BORDER – THE REALITY: MANAGE WHAT YOU CAN CONTROL THEN THINK OUTSIDE THE BOX

Jim Phillips,Canadian/American Border Trade Alliance

• It is important to develop a vision, and then to identify strategies and tactics for realizing that vision.
• Because it is not possible to solve every problem, the focus should be on managing what can be controlled.
• The United States and Canada must work together, while recognizing that each country is a sovereign nation.
• Efforts should be directed at ending both the collection of cash at the U.S.–Canada border and the use of paper manifests.
• NORAD provides a possible model for joint management of the U.S.–Canada border.
• Delays at the U.S.–Canada border lead to higher costs.
• Canada should increase its focus on biometrics.
• Because neither the American nor the Canadian government has enough resources to “do everything” alone, private sector–public sector partnerships are important.

INSIGHTS AND OPPORTUNITIES: FIRESIDE CHAT WITH CAN/AM BTA SENIOR ADVISORY BOARD

David Wilkins, Nelson Mullins Riley & Scarborough LLP

• The U.S.–Canada relationship, which is in a “new era,” is “vital.”
• President Trump communicates directly to the American people through tweets; from that perspective, Twitter is a “wonderful” communication tool.
• President Trump did not promise to be a diplomat, but rather to put America first and to make the United States more competitive; in that context, he has been successful through fewer regulations, tax reductions and trade policy measures, which is in contrast to Canada.

Bill Owens, Stafford Owens

• Efforts are now being directed to determining how and when the USMCA will be passed and implemented.
• Any new U.S. jobs or plants will be “heavily based on” automation, not on workers.
• China is “a villain,” and is engaging in currency manipulation, among other actions that are harming the United States and other countries around the world.

Lew Holloway, Buffalo and Fort Erie Public Bridge Authority

• The free flow of goods and travellers across the U.S.–Canada border is critical to the economies of both countries.
• While security continues to be important, it is possible to have both security and the free flow of goods and travellers, largely because of technology; technology should be leveraged to the greatest extent possible, including because fewer staff are needed as a result.
• The collection of cash at the U.S.–Canada border should end.
• PARE increases both efficiency and security.
• Efforts should continue to be directed at increased enrolment in NEXUS.
• All lanes into Canada should be RFID-enabled; as well, the country should have RFID-enabled passports.

Tom Winkowski,Global Border Solutions, LLC

• Technology will always change the ways in which business is conducted and the border is managed; as well, world events will always have impacts.
• Border agencies need to create procedures that minimize the use of “bricks and mortar”; while “bricks and mortar” is relatively inexpensive, operating and maintenance costs can be high.
• Facial recognition is transformative.
• The United States cannot be successful by itself; it needs to have strong partnerships, including with Canada and Mexico.

FEDERAL HIGHWAY ADMINISTRATION

Tricia Harr,U.S. Department of Transportation

• The United States needs an “excellent” transportation system; such a system is important to the country’s economy, especially for its role in facilitating trade.
• The U.S.–Canada trade relationship is the largest in the world, and the transportation system links the two countries.

Respectfully submitted,