U.S., Canada Vow to Continue Regulatory Cooperation

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By Rossella Brevetti

President Donald Trump and Canada’s Prime Minister Justin Trudeau agreed to seek “shared regulatory outcomes” and committed to establishing pre-clearance operations for cargo crossing the border, according to a joint statement issued by the two leaders.

The Feb. 13 White House meeting took place against the backdrop of uncertainty on what changes the Trump administration will seek in renegotiating the North American Free Trade Agreement (NAFTA) and tensions over recent moves by the administration to secure U.S. borders.

Cargo pre-clearance allows for expedited customs approval. Speeding up clearance of low-risk cargo can save companies time and money and also allows customs officials to focus on high risk trade. The two countries share the longest, secure border in the world. More than 400,000 people and $2.4 billion worth of goods and services cross the border each day.

Trudeau was the third foreign leader hosted by Trump since he became president.

Maryscott Greenwood, a principal in Dentons’ public policy and regulation practice and a senior adviser at the Canadian-American Business Council, welcomed the commitments on regulatory cooperation and pre-clearance. “We’re pleased that the crash course in how important Canada is to the United States seems to be having the desired impact at least so far,” Greenwood told Bloomberg BNA in a telephone interview.

Despite recent signals from Trump on border security, Greenwood said the commitment to cargo pre-clearance did not surprise her. “This is a president who wants to expand economic opportunity here in the United States,” Greenwood said. “To do that, you have to advance pro-business policies like cargo pre-clearance, she said. As long as there is cooperation on intelligence sharing and border, crossings, “cargo preclearance makes perfect sense to me,” she said.

Business Friendly Outcomes Sought

The joint statement said the two NAFTA partners will seek regulatory outcomes that are “business-friendly, reduce costs, and increase economic efficiency without compromising health, safety, and environmental standards.” The two leaders also pledged to “work together regarding labor mobility in various economic sectors.”

“We should coordinate closely, and we will coordinate closely to protect jobs in our hemisphere, and keep wealth on our continent,” Trump said at a joint press conference.

Cargo Pre-Clearance

The statement said that border security was a “top priority,” adding that the two countries were working on building a 21st Century border through initiatives such as pre-clearance of people and integrated cross-border law enforcement operations. “Recognizing the success of pre-clearance operations for travelers, we commit to establishing pre-clearance operations for cargo,” the joint statement said.

The leaders said they planned on accelerating the completion of pre-clearance for additional cities and to continue expanding the program. “In the spirit of a more efficient and secure border, we will also examine ways to further integrate our border operations, including analysis of the feasibility of co-locating border officials in common processing facilities,” the statement said.

In conjunction with Trudeau’s visit, Vice President Michael Pence met with a team of Canadian ministers and their U.S. counterparts. Participants from Canada included Minister of Public Safety Ralph Goodale, Minister of Finance William Morneau, Minister of Transport Marc Garneau, and Minister of National Defence Harjit Sajjan.

Secretary of Defense James Mattis and Secretary of Homeland Security John Kelly, acting Deputy Secretary of State Tom Shannon, and members of the vice president’s staff also participated in the meeting where Pence stressed the need to deepen cooperation on trade and investment as well as border security issues, according to a readout of the meeting. Canadian Foreign Affairs Minister Chrystia Freeland, whose portfolio includes U.S. trade, also accompanied Trudeau, according to a Canadian official.

Greenwood also underscored the importance of Trudeau’s meetings with House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.). “You have to deal with both branches of government, and Canada is really savvy about that and is doing a good job of emphasizing how intertwined the two economies are,” she told Bloomberg BNA.

Ryan said in a statement after the meeting that he had a “productive discussion focused on ways to deepen ties between the U.S. and Canada with respect to trade and national security.” Ryan said he stressed the “importance of breaking down trade barriers and improving market access for America’s dairy farmers.”

The U.S. Dairy Export Council, National Milk Producers Federation, International Dairy Foods Association as well as the National Association of Departments of Agriculture urged Trump to discuss a planned change to Canada’s milk pricing policy with Trudeau. “The pricing scheme, already implemented in Ontario last year and slated to be used by Canada’s other provinces this year, is expressly intended to slash milk imports from the United States,” the dairy groups said in a letter to Trump.

To contact the reporter on this story: Rossella Brevetti in Washington at rbrevetti@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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