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  • Regulatory Cooperation Council to harmonize economic regimes

    Posted on: June 12th, 2012

    By R. Bruce Striegler

    The bilateral Canada–United States Regulatory Cooperation Council (RCC) was created by Prime Minister Stephen Harper and President Barack Obama in February 2011 as part of the broader Beyond the Border action plan. RCC’s mandate is to align regulatory approaches across a broad spectrum of industries, including agriculture and food, health and personal care products and workplace chemicals, environment and transportation.

    With elements of Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness being implemented, the impacts are being felt particularly by those in manufacturing, export-import, shipping or transportation across the Canada-U.S. border. Melanie Tod, newly appointed Director General, Strategies and Program Integration, Transport Canada and Captain Kevin Kiefer, Chief of the Office of Port and Facility Activities, United States Coast Guard (USCG), outlined to PortSecure 2012 delegates how the Canada–U.S. shared vision for perimeter security and economic cooperation will support and advance commerce and trade.

    Transport Canada’s Tod stressed that both the security perimeter action plan and RCC action plan commit to improving relationships while maintaining safety, health, environmental protection and the sovereignty and privacy rights of each country.

    USCG point agency for marine policy

    Captain Kiefer in his role at USCG headquarters in Washington, D.C. is responsible for the safety and security of domestic ports where he has a specific focus developing policy for the enforcement of the Maritime Transportation Security Act (MTSA).

    MTSA is a significant piece of American legislation that reinforces the national and global importance of security for the marine transportation system, and provides a crucial framework for ensuring the safety of maritime commerce and U.S. domestic ports. MTSA’s key objective is to prevent a maritime transportation security incident, or any incident that results in significant loss of life, environmental damage, transportation system disruption, or economic disruptions.

    Eliminating costly border inefficiencies

    Ms. Tod explained that RCC will help reduce barriers to trade, lower costs for consumers and business, and create economic opportunities on both sides of the border. It identifies 29 initiatives where Canada and the U.S. will align their regulatory approaches.

    “RCC focuses on four key areas which include addressing threats at the earliest possible opportunity, facilitating trade, economic growth and jobs, building on successful cross-border law enforcement programs while enhancing cross-border critical and cyber infrastructure. Here’s some perspective,” she says. “It is estimated that if a shut-down happened in a major U.S. port, it would cost a billion dollars a day. A shut down in a Canadian port would cost a hundred million dollars a day.”

    Economic studies demonstrate that the inefficiencies at the Canada-U.S. border are imposing a direct cost on the Canadian economy of one per cent of GDP, which is $16 billion a year or roughly $500 for each man, woman and child in Canada each year. In the current environment, each country requires different information for companies seeking to clear customs. Harmonizing cross-border customs requirements will reduce clearance time and expense.

    One of the most often cited examples are automotive parts. They can cross the border as many as six times before the finished automobile is sold to a customer in either market. This cross-border movement of production components has been estimated to add several hundred dollars per vehicle during assembly, adversely impacting North American competitiveness.

    Fall 2012 pilot projects in Prince Rupert and Montreal

    Ms. Tod says that, along with USCG, Transport Canada is working on three specific marine security initiatives. The first is to develop a harmonized cargo security strategy to indentify and establish similar risk-management processes and harmonized data requirements for commercial imports and transshipments.

    “We’re hopeful that soon we’ll be speaking a common risk language. These changes can’t happen overnight. They require planning and testing. The action plan proposes two marine-focused pilot programs expected to streamline cargo screening and reduce red tape for shippers, to be launched this fall in the ports of Prince Rupert and Montreal. After evaluation and lessons-learned, the program will be expanded nationally,” she said.

    Currently, cargo bound for U.S. destinations arriving by ship at a Canadian port is screened at the Canadian port of entry and then again at the U.S. land border. This double-screening increases costs, creates delays and scheduling uncertainty for rail companies and their U.S. customers. Ms Tod says, “Simply put, we will be introducing ‘Cleared once, accepted twice’ (see also “Canada and the United States announce air cargo security simplifications” on page 36).”

    Captain Kiefer commented that the new strategy will improve the efficient exchange of cargo between the United States and Canada by sharing security information and eliminating redundancy. “The goal is to reduce the number and volume of trans-shipments subjected to re-inspection at the border. We’re going to use 2011 as the baseline to establish criteria. This initiative is all about balance between security and facilitating trade.”

    What should we know when we need to know it

    Ms. Tod gives details of the second initiative, “It is to enhance our domain awareness by identifying and addressing vulnerabilities, by developing a common approach to assessing threats. This is based on the principle that a threat to either country represents a threat to both. We are doing this by creating an inventory of existing domain awareness capabilities – what do we know and how do we know it. We will then prioritize and address any identified gaps – what we don’t know that we should know.” She said that work is proceeding on a bi-national review of all surveillance and detection technologies at the Canada- U.S. border, and following these steps, the U.S. and Canada will develop a joint process for procuring and deploying new technologies along the border, to “help us know what we should know when we need to know it.”

    The third initiative is to develop recovery plans at the regional level to manage cargo flow in the event of a major maritime disruption. To deal with cross-border maritime emergencies, Canada and the U.S. are collaborating on a framework for strengthening maritime trade resilience and recovery in the event of an emergency. Transport Canada will build Canada’s networks and regional maritime resilience plans and strategies in partnership with Canada’s port communities

    Tod says, “As much as we try to guard against threats, the risk of emergencies affecting the maritime domain are as present as ever. It is important we develop plans for managing emergency incidents so as to return to normal operations as quickly as possible. Advanced planning and testing of responses can greatly cut the time that disruption of maritime commerce would be affected during and following an incident.”

    Captain Kiefer acknowledged the work underway in the Pacific Northwest by the Pacific Northwest Economic Region and the Puget Sound Area Maritime Committee stakeholders and in British Columbia with Transport Canada’s Maritime Commerce Resumption project.

    The Maritime Commerce Resumption project held recent workshops that began in B.C., and Ms. Tod says, “We will hold a joint U.S.-Canada workshop this summer and a table top exercise later this fall. The intended outcome is to mitigate the impacts of disruption on communities and economies by managing traffic in the event of an emergency. Transport Canada and the U.S. Coast Guard are working with the Pacific Northwest Economic Region on this initiative, and we’ll be undertaking similar projects in the Atlantic and Great Lakes regions in 2013.”

    Streamlining regulatory requirements

    RCC has received less attention among those responsible for border security because their focus is typically on security implications and less on trade. Ms. Tod points out, “RCC is more of a trade element. It committed both countries to find ways to reduce and eliminate regulatory barriers to cross-border trade. Simplified rules and reduced red tape will lead to lower costs for businesses and consumers, ultimately leading to more competitive markets, improved social well-being and more jobs.”

    Tod says that Transport Canada and USCG are working on harmonization of marine security regulations and are reviewing the regulatory oversight regime on the Great Lakes and the St. Lawrence Seaway.  “We are working to align those regulatory requirements and remove undue administrative burdens and impediments to the marine transportation system. We want to establish protocols between USCG and Transport Canada around ongoing regulatory alignment in the marine transportation security industry. We want to be moving forward in the same places.”

    Ms. Tod discussed amendments to the Marine Transportation Security regulations, which will make the Canadian definition of certain dangerous cargos the same as that of the U.S. and to add a reference to the alternative security arrangements in the Canadian regulations. “We feel that each of these will greatly contribute to reducing regulatory burdens for both Canadian and U.S. maritime industries.”