U.S., Canada Planning Harmonized Trading Rules Amid Canadians’ Objections

The U.S. and Canada plan to harmonize regulations governing the most-heavily traded products, U.S. Ambassador to Canada David Jacobson said, one day after a report showed some Canadians are uneasy with the idea.

The two countries will release more details over the next several weeks on the “first tranche” of industries where conflicting regulations will be harmonized, Jacobson said in an Aug. 30 interview with Bloomberg News. He didn’t elaborate on specific products.

“It’s fair to say that we want to focus on areas where there is more trade, because the more trade that we focus on, the more jobs that we’re going to create in this process,” Jacobson said.

The effort will focus on streamlining “dumb” regulations that are “different because they’re different,” said Jacobson, 59, who took office as ambassador in October 2009.

The move comes as Canada and the U.S. try to build on a pledge made in February by President Barack Obama and Prime Minister Stephen Harper to work toward a shared security “perimeter,” aimed at protecting against threats such as terrorism and accelerating the “legitimate” cross-border flow of people, goods and services.

Jacobson said the countries will soon release an “action plan” that will provide more details on the proposed measures.

The two countries have the world’s largest two-way trading relationship, reaching almost C$600 billion ($613 billion) in 2009. Canada’s main merchandise exports to the U.S. are mineral fuels such as oil, motor vehicles and machinery, while the biggest exports by the U.S. to Canada are motor vehicles, machinery and electrical and electronic equipment, according to government data.

Consultation Reports

Canadian Foreign Affairs Minister John Baird released two reports Aug. 29 that summarized consultations with other levels of government, Canadian businesses, non-governmental organizations and the public.

A report on potential regulatory cooperation outlines proposals in industries such as agriculture and food, environment and energy, transportation, and health and consumer products.

Proposals in the auto industry would implement common rules for safety and emissions standards. Cooperation on energy may lead to a “Canada-U.S. regime for permitting oil-and-gas pipelines,” the report said.

Canada’s customs agency said in June it is looking at ways to speed inspection of food products that are imported by companies that qualify as posing little risk.

Opposed to Integration

Many individuals said they were worried about regulatory harmonization. “Some are absolutely opposed to any further Canadian integration with the U.S. and expressed concern for the perceived erosion of Canadian sovereignty, rights and public accountability,” the report said.

A separate report on a shared perimeter found that business groups generally supported greater cooperation against security threats such as terrorism. Some individuals said they were concerned about the impact that greater sharing of intelligence and information might have on privacy, civil rights and Canadian sovereignty, the department reported.

“Those are values that Americans are just as concerned about as Canadians are,” said Jacobson. “We are approaching this border-vision, regulatory-cooperation process from both sides of the border with the most fundamental desire and instruction not to compromise on sovereignty, not to impinge on people’s privacy, not to impinge on their individual rights.”

To contact the reporter on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net.

To contact the editors responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net; David Scanlan at dscanlan@bloomberg.net.

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