On a sunny August morning in 2007, while protesters were cordoned off by a security perimeter and reporters corralled into a side room, a high-powered meeting took place inside Quebec’s woodsy Château Montebello. On one side of a square meeting table sat Prime Minister Stephen Harper and his aides. On another sat then-U.S. president George W. Bush and his entourage, and on a third, the delegation of Mexican President Felipe Calderón. On the fourth side, in a rare position to hold the simultaneous attention of all three leaders of North America, sat the CEOs of corporate titans like Wal-Mart, Lockheed Martin, the Campbell Soup Co. and Procter & Gamble—each armed with a wish list of ways to change economic and trade regulations to increase profit and efficiency.
The occasion was the annual “three amigos” summit, a ritual that had begun in 2005 when Bush invited his counterparts to meet and address concerns that security had trumped trade in the years since 9/11. The three leaders created 20 working groups of bureaucrats, hammering away on issues from harmonizing regulations to developing pandemic preparedness plans. The effort, called the Security and Prosperity Partnership (SPP), was meant to continue North American economic integration where NAFTA had left off.
But after the reports were written and communiqués issued, a funny thing happened: that is to say, not much. Or, rather, something big happened: the election of Barack Obama. The SPP had withstood the transition from Paul Martin to Stephen Harper and from Vicente Fox to Felipe Calderón. But at the first trilateral summit attended by Obama last summer in Guadalajara, Mexico, the leaders shut it down. The 20 working groups were disbanded; Obama declared the process should be left to individual cabinet secretaries and ministers, and opened to the public and other interest groups such as his allies in the labour unions. Although the leaders identified 10 priority areas, the results of the ad hoc process, if it can be called a process at all, have been negligible, according to Chris Sands, a senior fellow at the Hudson Institute, a Washington think tank, and Greg Anderson, a political scientist at the University of Alberta in Edmonton, who have concluded that little headway has been made on any of the 10 agenda items.
This year would have marked Harper’s turn to host another trilateral summit, but no date has been announced. Washington wasn’t interested and absent a senior White House point person on the issue, there is no momentum. “The thing that is really damaging if we don’t have a summit is the signalling to the bureaucracy that North America can wait,” said Anderson, “that there are other fish to be fried.”
What killed the SPP? Perhaps the leaders’ desire to avoid igniting fresh debates about trade at a time when, on Capitol Hill, numerous trade agreements languish in limbo. Or maybe the alarm over big business writing lists for governments. There was so much corporate interest in the project that in 2006, the leaders had formally invited the CEOs to come together and present a prioritized to-do list. Dozens of corporations wanted to get involved—each with different priorities. They formed a committee called the North American Competitiveness Council (NACC), and began putting together a common list of recommendations for the leaders. This alarmed those on the outside looking in. Members of Congress complained they were denied oversight. Canadian environmentalists and labour unions feared a secret deal to sell out Canadian water and workers. Canadian nationalists suspected a plot for a U.S. takeover of Canada, while American nationalists suspected a plot for a takeover of the U.S. by a “North American union” and a mythical common currency called the “Amero.”
At Montebello, the discussions were decidedly less grandiose, but still ambitious. Against a backdrop of around $800 billion in annual trilateral merchandise trade, the CEOs took turns making presentations about how to fine-tune the continent’s economic engine. They spoke about the impact of duplicative regulations and mounting red tape; the self-effacing Lee Scott, then president of Wal-Mart, talked about the hurdles to business posed by growing paperwork at the border. David Ganong, then president of New Brunswick’s Ganong Chocolates, discussed the compliance costs imposed by multiple food and labelling regimes—which require the firm to separate inventories because the two countries can’t agree on what constitutes a jelly bean. The confectioner’s woes in particular made an impression. Harper later told reporters, “Is the sovereignty of Canada going to fall apart if we standardize the jelly bean? I don’t think so.”
Three years later, however, the dream of a quick path to a grand unified jelly-bean regulation—and to countless other harmonization measures—appears to have been as delusional as the paranoid fantasies of the conspiracy theorists. The most progress, Sands and Anderson say, was on the energy and climate agenda: there is an agreement to talk about it. There was also co-operation on pandemic preparedness in the wake of the H1N1 flu outbreak. And the leaders’ promise to avoid protectionism was arguably fulfilled—if you don’t count the Buy American provisions attached by Congress to American government stimulus spending, from which Canada was eventually given a waiver—after almost all the money was allocated. But there’s been little progress on other SPP agenda items, such as regulatory harmonization and improvements to border efficiency. “There has been a lot of talking and some incremental progress,” said Sands. But without leadership from the top, “We are now captive to a bureaucratically driven process. If anyone in the bureaucracy wants to block it, there is no one to push it.”
If the leaders’ agenda is progressing slowly, that of the CEOs is essentially frozen. “The whole issue has fallen onto the back burner, if not off the shelf completely,” says Kelly Johnston, vice-president of government affairs for the Campbell Soup Co. There is no one in the Obama administration who is charged with thinking about the future of North American competitiveness, and, in contrast to the former front-row seat, the CEOs, said Johnston, now have “no place to go” to discuss their wish list for reform. “We hoped [the SPP] would re-emerge in some new form with more inclusion and transparency and some significant White House leadership,” said Johnston. But instead, “There is no focus on this issue. It’s like it’s gone back to before the North American Competitiveness Council even happened.”
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