A Look at Canada-US Relations

1. A Look at Canada-US Relations

2. Fight, Work and Play

3. Our Trade: Some Facts • Over 8 million U.S. jobs depend on trade and investment with Canada • Canada is the top export destination for 35 states • Canada is the United States’ largest and most secure supplier of energy: oil, natural gas, electricity and nuclear fuel • 400,000 people cross the Canada–U.S. border daily • 40% of trade is intra-firm • 1/3 of Canadian exports to U.S. contain U.S. 'content’ Source Canadian Embassy in Washington

4. Canadian Trade with Illinois • Over 300,000 jobs in Illinois depend on trade and investment with Canada • Canada is your top export market – bigger than Illinois next four destination markets put together • CN Rail, BMO Harris Bank run their US operations from Chicago • Canadian investment creates 25,000 jobs in Illinois • 70% of Canadian crude exports to the USA comes to the midwest market • A million Canadians visited Illinois last year spending $300 million Source Canadian Consulate Chicago

8. Supply Chain Dynamic … We Make Stuff Together

10. Oil

11. Observations • Allies, Partners and Friends • Deep economic integration – more than trade we make stuff together • Primary Canadian objective is access for goods, people and services • Regulations have replaced tariffs as main trade barrier • 9-11 and US security concerns/paranoia and old-fashioned protectionism are ongoing Canadian challenges

13. Canada and Mexico

14. Mexico NAFTA (1994) and the Canada-Mexico Partnership (2004), Joint Action Plan (2010) focused on fostering competitive and sustainable economies; protection of citizens of both countries; enhancement of people-to-people contacts and the projection of the partnership regionally and globally. Interparliamentary association, North American Summits 2500 Canadian companies currently operating in Mexico, including giants such as Bombardier, Scotiabank, Magna, Blackberry, Goldcorp and CP 17,000 temporary agricultural workers and 10,000 students

15. And play Second most important tourist destination for Canadians with some 1.8 million visits per year vs 130,000 from Mexico, low in part because of visa restriction applied in 2009.

16. Observations • Trade, Investment and Tourism continues to grow from Canadian side • Mexicans see no natural fit for investment in Canada • Canadian Visa restriction hampers Tourism, Trade, Investment • Government to Government Institutions need to be revitalized • Canada can do much more in technical assistance on policing and judicial training as we have done on election reform

17. NAFTA worked…

19. Canadian Trade Partners

20. US Trade Partners

22. U.S. Trade with North America, 1992-2012 AAGR isAverageAnnualGrowthRate. Sources: TradeStats Express, U.S. Census Bureau, OECD, WTO, IndustryCanada

23. Trade by Truck and Rail

24. but it peaked in 2000

28. US thickens the borders

29. …,with new security at the crossings

30. Cost of Delays & Missed Opportunities • Annual cost of delays and border security restrictions: $27 billion (2.7% of trade in 2008) • Border transfer cost of ‘drayage’ (prohibiting trucks) $616 million in 2008 (or 15% of volume of trade) • Cost of building a wall on the southern border: $2.1 billion • Annual cost of cabotage (Jones Act): $656 million • Annual Cost of “rules of origin” procedures approx. $35.7 billion • Annual cost of divergent regulations totals 2-10 % of production costs Sources: Robert A. Pastor, The North American Idea (New York: Oxford University Press, 2011); Alex James Appiah, Applied General Equilibrium Model of North American Integration with Rules of Origin, Doctoral Dissertation for Simon Fraser University, November 1999; Michael Hart, “Trading Up: The Prospect of Greater Regulatory Convergence in North America,” (U.N. Economic Commission for Latin America and the Caribbean, April 2007).

31. The Public Gives Priority to North America

32. Public Wants More Cooperation on Transnational Policy Issues

33. U.S. Support for Common Border Policies

35. Observations • Asymetrical: US is the hub with Canada and Mexico trying to avoid being spokes • More dual bilateralism than trilateralism • NAFTA has baggage (unfairly) as symbol for outsourcing and job loss • Potential is still great: Resources, including Energy, Market, Labour with improving Transportation grids make for increasingly integrated North American supply chains … Trilateralism needs renovation thus Trans Pacific Partnership

36. Comparing North America with TPP and TTIP: What should be our priority, strategically and tactically? • In 2010, the three North American countries accounted for 90% of the gross domestic product of TPP countriesexcluding Japan, and 82% of U.S. exports to TPP countries go to our two neighbors, Mexico and Canada Trans Pacific Partnership (TPP) includes Australia, Brunei Darsussalam, Canada, Chile, Malaysia ,Mexico, New Zealand, Peru, Singapore, Vietnam and the United States.Note: TPP GDP without the U.S. is $2.594 trillion Sources: APEC and North America data from StatsAPEC, GDP and total trade for Western Hemisphere and TPP from World Bank dataBank, US exports data from US Census Foreign Trade division

37. NAFTA…it still works