Great Lakes Seaway Review: North American Rebound

This article originally appeared in the April – June 2020 edition of the Great Lakes Seaway Review

Written by: Janenne Irene Pung

From an improving global economy to protectionism—results of COVID-19. With executive orders closing borders and businesses for public safety, elected officials speak of turning inward, socially and economically.

Onshoring.

Tariffs.

Reducing cross-border trade.

Those words are reappearing in the wake of the pandemic—on the heels of the long and difficult negotiations that led to establishing the United States-Mexico-Canada Agreement (USMCA).

Catherine Loubier, Delegate General of Quebec in New York

“The next six months or year will be very important because all kinds of legislation will be proposed and decisions made that can impact us for a long, long time,” said Catherine Loubier, Delegate General of Quebec in New York. “We are extremely integrated as a region and it’s important to push back against protectionism.”

Loubier is an originator of North American Rebound (www.cabc.co/rebound), a new campaign consisting of more than 100 signers from throughout the U.S. and Canada. During a phone call with Maryscott Greenwood, CEO of the Canadian American Business Council, the two brain-stormed the group to influence continued binational trade.

CABC CEO Maryscott Greenwood

“It is critical in times of crisis to ensure the maintenance of the Canada-U.S. relationship,” said Greenwood. “This means fighting back against protectionism and buy-American and buy-Canadian. The Canadian American Business Council advocates for an open and efficient supply chain in both times of peace and crisis for the mutual benefit of our two countries.”

North American Rebound is calling the nations to “stand strong for a common cross-border manufacturing response as we tackle the COVID-19 public health crisis and help our shared economies rebuild and recover.” The group’s response to the pandemic involves:

• Securing personal protection equipment in both countries

• Designing binational manufacturing solutions to replenish and maintain strategic stockpiles of medical equipment

• Continuing to ensure people and goods cross the border efficiently without interrupting critical supply chains

• Expanding market opportunities between the two countries to spur economic recovery and compete globally

“Now more than ever, it’s critical to allow the free flow of goods and personnel necessary to support the biomedical science community,” said Paul Belmonte, Ph.D., Mayo Clinic. “American and Canadian innovation has led to discoveries like a vaccine against polio and the discovery of insulin. Let’s not have this innovation stop with COVID-19 and allow scientists to lend their hand creating the cures for tomorrow.”

“The U.S. and Canada have a unique economic partnership that has moved beyond trade and is unlike any other,” said Garry Douglas, President/CEO of North Country Chamber of Commerce. “Together, we compete with greater effectiveness against the rest of the world. In the past, this special relationship has found itself automatically swept into responses to unfair trade or economic challenges involving other places. As we recover from this pandemic and reclaim economic leadership, it is crucial that this not happen and that we instead move together.”

Essential & nonessential

When the pandemic began prompting border closures and travel restrictions, both President Donald Trump and Prime Minister Justin Trudeau agreed to restrict nonessential travel between the countries. The March 18 closure has been extended twice, with the current reopening date set for July 21.

Specifically, border crossings for recreation and tourism were banned.

While cargo movement for the Great Lakes/Seaway shipping industry was not directly hindered, the closing of businesses such as steel mills disrupted demand for products such as taconite and coal. The downturn caused ships to layup mid-season.

North American Rebound isn’t disputing COVID-19 safety measures. It is, however, concerned with reactive measures that further hinder North America’s economic recovery. It is mounting support for an information and communication plan—targeting leaders who will introduce legislation on trade crossing the U.S.-Canadian border.

“What we call non-essential is, in fact, essential to supporting the health of the relationship and economy between our countries,” Loubier said, noting that all sectors of the economy are important. “Protectionism is the wrong way to go, and when I visit legislators with that message, I am surrounded by all of these voices. It makes a huge difference. We need to balance safety and security while recognizing the economic relationship.”

Quebec exports about $92 billion to the world annually, 72 percent of that to the United States. Provincial trade with the State of New York is valued at $8 billion annually.

 Just like the regional shipping industry, Loubier witnessed the impact of President Trump’s tariff on aluminum. Quebec exports $7 billion in aluminum, mostly in the region. The impact of the tariff trickled through the supply chain.

“The Great Lakes/Seaway region represents $35 billion in economic activity,” she added. “We have to support the shipping industry and our clients. Shipping is an absolute pillar in our recovery and our export potential. We have the longest, most secure border in the world and the Seaway is at the heart of it. We must do everything in our power to preserve that.”

Protecting USMCA

While the campaign was prompted by the economic crisis resulting from COVID-19, the slow trinational approval of the USMCA creates its own concerns. Businesses on both sides of the border are jumping in to ensure new legislation doesn’t undo the trade deal.

Signers of North American Rebound reached 40 in the first week and are now over 100. Throughout the summer, the group will continue to recruit signers.

Participants represent a mix of businesses based in the United States, Canada and both countries. Some of the signers represent commodities like the American Seed Trade Association and Canadian Food Exporters Association. Manufacturing is well represented, from healthcare technology to freight organizations that move the products for assembly. A list of signers is found on the campaign website.

While protectionism isn’t new, stakeholders in the binational supply chain endured the long, hard fought negotiations of the USMCA. The two-year process included political rhetoric, tariffs, elections and questions on whether a new North American trade agreement could be reached. Negotiations lasted eight rounds.

“We worry about the administrative burden of implementing it by July 1 with a set of detailed regulations,” Greenwood said. “Absent the pandemic is one thing, but people are just trying to get through the current crisis. In addition to influencing legislation, the campaign is a defensive move because as we see the economic rebuild happening, anything that’s not consistent with USMCA—we’re going to have an opinion about that.”

Photo by Chris Pagan on Unsplash

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