Canada banking on U.S. push to make Beyond the Border successful

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Almost two years after Barack Obama and Stephen Harper formally launched the Canada-U.S. Beyond the Border initiative, our two countries' effort to adopt a common approach to security and business regulations has produced few tangible results.

Proponents of the so-called BTB project are hoping all that will change with the release, as early as this week, of a progress report on a series of pilot projects aimed at harmonizing regulatory processes under the initiative launched by the two leaders at a February, 2011 White House summit.

"You need to have some success … so that all the parties involved maintain faith in the process," Michael Fitzpatrick, General Electric's senior counsel for government and regulatory affairs, told a Wednesday conference at the Wilson Center's Canada Institute.

"You also need to have top down political pressure on the process," added Mr. Fitzpatrick, who until recently served as an official in the Obama administration's Office of Information and Regulatory Affairs.

While few question Mr. Harper's personal commitment to advancing the BTB process, it remains to be seen whether Mr. Obama makes the initiative a second-term priority. And without a push from the top on the U.S. side, the BTB effort could well peter out.

"This whole thing could sink below the water in the United States and no one would take note," said Paul Frazer, a Washington government relations consultant and former Canadian diplomat. "If it sinks below the water in Canada, it would be a very big political problem because the government of Canada is seen as having gone out on a limb on this."

The asymmetry of the bilateral relationship means that Canada risks making more concessions than the United States in order to advance the border initiative, while there is no guarantee that the advantages accorded to Canada would be Canada's for long.

"Canada wants this more than the Americans do," noted Christopher Sands, a Canada expert and director of the Hudson Institute's Initiative on North American Competitiveness.

Writing in a Wilson Center recent newsletter, Mr. Sands added: "The U.S. practice of taking ideas that work with one partner and applying them to other partners will undercut the exclusiveness of any Canadian gains…At the same time, the United States will use concessions by other trading partners to pressure Canada as well."

Laura Dawson, an Ottawa-based trade consultant, noted that delays at the Canada-U.S. border add $800 to the price of every car manufactured in North America. While a car imported from Japan or Korea clears customs only once in the United States, a North American-made car faces multiple fees and inspections as its components cross between the two countries.

The BTB effort is aimed in part at reducing that regulatory burden for businesses, in turn stimulating cross-border trade and enhancing the competitiveness of North American businesses. But many businesses remain skeptical that much will come of the BTB, as regulators in each country remain protective of their own rules and jurisdictions.

The Beyond the Border effort is a less ambitious initiative than the trilateral Security and Prosperity Partnership proposed between Canada, the United States and Mexico in 2005. The SPP met political opposition in all three countries and was abandoned in 2009.

The Beyond the Border initiative has so far steered clear of controversy by setting the bar somewhat lower.

Under an effort led by the Canada-U.S. Regulatory Cooperation Council, set up under the BTB initiative, the U.S. Food and Drug Administration and Health Canada's Veterinary Drugs Directorate on Wednesday announced the first simultaneous review and approval of a veterinary drug application – an anti-flea medication for cats.

The FDA and Health Canada "worked collaboratively from the same fundamental effectiveness data set to approve" the drug, according to a statement released by the U.S. embassy in Ottawa. The two agencies' veterinary drug units "plan to build a process to allow simultaneous submissions and collaborative review's where possible, while maintaining each country's right to decide whether or not products will be approved for its market."