This week, newly elected Canadian Prime Minister Justin Trudeau will arrive in Washington for a state visit—a demonstration of the deep ties that connect the United States and Canada—and the first state dinner for a Canadian leader in nearly two decades.
The United States and Canada share a vibrant trade and investment relationship. Canada had long been the largest U.S. trading partner and ranked second last year behind only China. Canada remains the largest U.S. export market for manufactured goods (totalling $246 billion), and Canada is the United States’ third-largest supplier of manufactured goods imports (totalling $208 billion). Cross-border U.S.-Canadian investment remains high, with Canada the largest destination for U.S. foreign direct investment in manufacturing at $107 billion, and Canadian investment in manufacturing in the United States the eighth largest source at $57 billion.
Despite our vast network of commercial ties with Canada, the two countries are facing several priority trade policy and investment issues. As Prime Minister Trudeau and his delegation meet with President Obama and other key U.S. government officials, manufacturers urge them to address these topics as they consider how to further enhance our economic relationship.
Trans-Pacific Partnership (TPP). While the United States and Canada have long shared a deeper trade and investment relationship through the North American Free Trade Agreement (NAFTA) and the predecessor U.S.-Canada Free Trade Agreement, the two countries can further deepen ties by working together to advance the TPP that was signed by both governments and the other 10 TPP partners on February 3. While the Trudeau government is still undertaking a full review and the Obama administration is engaging with key stakeholders to address outstanding concerns raised by the NAM and others, it is important for the United States and Canada to move the TPP forward to improve manufacturers’ competitiveness in the important—and growing—Asia-Pacific region, including by addressing key issues important to manufacturers.
“Beyond the Border” Progress. In February 2011, the United States and Canada announced the “Beyond the Border” initiative with joint priorities and specific activities to promote border security and cross-border trade facilitation. The most recent annual report on the initiative was published in May 2015 and highlighted major new investments in improved border infrastructure, harmonized trusted trader programs and coordination on cybersecurity. Both countries have agreed to a Forward Plan that includes commitments on integrate cargo security screening, enhance visa screening, facilitate business travel and promote trusted trader programs. As a co-chair of the Businesses for a Better Border (B3) coalition, the NAM continues to urge the two governments to find common ground on enhanced trusted trader programs with tangible benefits for participants, harmonized cargo release procedures at the border and coordinated border security requirements.
De Minimis and Trade Facilitation. Given the high volume of trade between the United States and Canada, manufacturers are eager to decrease red tape, delays and other barriers to greatly expand trade flows. We strongly urge Canada to raise its de minimis threshold, the value under which products are not required to undergo customs processing and are not assessed border tariffs. Canada’s de minimis level is C$20 for online purchases, while the United States just raised its de minimis level to $800 as part of the recently passed customs bill. Earlier this week, U.S. Sens. Richard Blumenthal (D-CT), Chris Murphy (D-CT) and Ron Wyden (D-OR) urged the prime minister to increase Canada’s de minimis threshold to a commercially reasonable level.
Regulatory Cooperation. The United States and Canada launched the Regulatory Cooperation Council (RCC) in 2011 to promote efforts between U.S. and Canadian agencies to align regulations in areas such as food, health, environment, work safety and transportation. The two governments expanded the RCC’s work in 2015 with agency-specific work plans.
Regulatory barriers for manufacturers in Canada remain a priority issue for the NAM and its members, and the NAM continues to seek progress on promoting transparency and business participation in drafting regulations. Manufacturers also continue to emphasize the importance of science-based, risk-appropriate regulations that reflect both costs and benefits for manufacturers in both countries.
Intellectual Property. Manufacturers in the United States have long recognized the importance of strong intellectual property protection to grow our innovation and manufacturing competitiveness. As reflected in recent NAM comments and submissions, manufacturers believe that progress in Canada is vital to ensure full intellectual property protection for all industries in accordance with Canada’s NAFTA and other international commitments.