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A U.S. border agent watches video monitors of cameras placed along the U.S. and Canada border at the American border crossing at Sweetgrass, Montana, May 28, 2009.Todd Korol/Reuters

Stephen Harper's Conservatives are negotiating a perimeter security agreement with the United States - a deal designed to ensure the vital trade flow between Canada and its largest trading partner is not choked off by the aggressive U.S. security bureaucracy.

"We intend to work together to defend and protect the land, maritime, air and cyberspace domains of both the United States and Canada and to enhance the security of our integrated transportation and communication networks," says a draft version of a declaration on a possible deal obtained by The Globe and Mail.

"We intend to pursue a perimeter approach to security, working together within, at and away from the borders of our two countries in a way that supports economic competitiveness, job creation and prosperity, and in a partnership to enhance our security and accelerate the legitimate flow of people and goods between our two countries."

Since the Sept. 11, 2001, terrorism attacks in the United States, Canada has fought a constant battle to convince the Americans that bilateral commerce needs to be protected from the ever-expanding U.S. security clampdown that is clogging trade with new rules and procedures. Increasing border controls, for instance, in recent years have forced companies to abandon just-in-time shipping and stockpile goods to reduce the risks of transaction delays in cross-border trade.

It's not clear how close Canada and the United States are to signing a deal that would more closely intermesh Canadian and U.S. security bureaucracies. The Prime Minister's Office refused to comment on the matter on Wednesday evening, and Canadian officials denied an announcement is imminent.

The draft statement says the two countries intend to establish a "Beyond the Border Working Group" of officials to implement and oversee the agreement. In Canada, the Privy Council Office would take the lead, while in the United States it would be national security staff within the White House.

"We intend for the BBWG to report to their respective leaders within 120 days of the signing of this declaration with a joint plan of action to realize the goals of this declaration," it says.

The deal could trigger concerns over privacy and sharing of information with the U.S. Department of Homeland Security, but the statement says a deal would respect sovereignty, privacy and civil liberties.

Envisioned aspects of the deal include:

-An integrated cargo security strategy that ensures compatible screening methods for goods and cargo before they depart foreign ports for the U.S. or Canada.

-Closer co-operation between law enforcement agencies in both countries.

-A joint approaching to screening people seeking to enter the United States or Canada, including new security investment in the top 10 publicly owned ports of entry. "In order to promote mobility between our two countries, we expect to work towards an integrated United States-Canada entry-exit system by identifying and screening at the earliest opportunity - including through the use of biometrics," the draft statement says. "At the land border, we intend to work towards exchanging entry information on foreign nationals so that documented entry into one country serves to verify exits from the other country."

-Cross-border sharing of information on serious offenders, criminals and suspects. "We intend to improve the sharing of relevant law enforcement information to identify known and suspected serious offenders and violent criminals on both sides of the border," the statement reads.

-A joint approach to port and border security. "By planning together, organizing bi-national port of entry committees to co-ordinate planning and funding, building, expanding or modernizing shared border management facilities and border infrastructure where appropriate, and using information technology solutions, we intend to enhance our risk-management practices and accelerate the legitimate movement of people and goods between our countries."

It would also include a closer working relationship for the Canadian and U.S. militaries in emergencies, building on a 2008 agreement that sets out rules for how each country can call for the other's assistance.

Liberal transport critic John McCallum said he's surprised the Harper government has been engaged in such a potentially big trade and security deal with the United States without informing Canadians or discussing it in advance with Parliament.

He said his party is concerned a deal could impinge on Canadian sovereignty, including refugee and immigration policy. "If someone is inadmissible to the U.S., does this mean they're not allowed in Canada either?"

Mr. McCallum said it's also surprising that Canada is devoting so much energy to enhancing trade with the United States when there is a good argument to diversify trade beyond a market where consumers and government are heavily indebted.

"The political energy of a government is finite. There's a risk if we put all our eggs in the U.S. basket we will have less energy to diversify elsewhere."

The draft statement suggests the Canadian government is acceding to American security demands in order to protect the flow of cross-border trade.

"An increasingly integrated and globalized world, with new and emerging security and economic risks, requires us to be innovative. As the threats and challenges we face are increasingly sophisticated and global, our responses must be as well," it says.

This will mean closer collaboration on law enforcement. "We intend to work together to uncover and disrupt threats that endanger the security of both the United States and Canada and to establish those agreements or policies necessary to ensure timely sharing of information for combined efforts to counter the threats," the draft statement says.

"To increase security, counter fraud and improve efficiency, we intend to work together to establish and verify the identities of travelers and conduct screenings at the earliest possible opportunity."

The agreement would also combine efforts to fight terror threats and computer hackers.

"We intend to work together to prevent, respond to, and recover from physical and cyber disruptions of critical infrastructure and to implement a comprehensive cross-border approach to strengthen the resilience of our critical and cyber infrastructure."