Last week we quoted Alanis Morissette – “isn’t it ironic, don’t you think …”
It appears that the back and forth actions and reactions over the Port of Prince Rupert Ferry Terminal Project (the “Prince Rupert Ferry Project”) have resulted in a kind of trade related “mutually assured destruction” (otherwise known as “M.A.D.” in other contexts). There is some irony in that a “defensive” trade measure originally designed by Canada to counter the extraterritorial reach of a U.S. measure aimed at blocking trade with Cuba (the FEMA), was recently employed to block a U.S. measure’s application on Canadian soil in the Prince Rupert Ferry Project. While at the same time, the U.S. began re-opening trade with Cuba. It even appears that the “good offices” of Canada have been leveraged in bringing the two Cold Warriors together.
Aside from recognizing the irony and the importance of staying up to date with how international trade measures can affect your business, here are some further thoughts. The halt that was put on the Prince Rupert Ferry Project by the invocation of the FEMA has occurred at a time when both Canadian and Americans need the work and at a time when business could certainly use the improved infrastructure. Therefore, perhaps it is time we consider the need for better metaphorical “bridge building” between the world’s two largest commercial partners.
Yes, the Buy America Act and the application of the FEMA seem to have added to an ever growing list of trade irritants, but it is important to keep them in perspective. On a positive note, it should be highlighted that approximately $2 Billion of two-way trade crosses the Canada-U.S. border every day – unimpeded by trade barriers and increasing exponentially via various measures and tools the two countries have put in place. In fact, it is often said that over 98% of our bi-lateral commerce takes place without irritants and that the attention or “noise” caused by the headlines over cases like the Prince Rupert Ferry Project gives us (Canadians, Americans, and all those watching us fight) an inaccurate impression of the state of Canada-U. S. trade relations. This is probably correct.
Approximately twenty years ago, a colleague and I represented Canada in what is now known as the “Beer Wars”, a double barreled trade dispute fought out in Geneva at the GATT (now the WTO). Although both countries took aim at each other’s long list of politically sensitive provincial and state measures affecting the distribution and sale of alcoholic beverages, the leadership of both nations remained committed to maintaining the integrity of the Canada- U.S. Free Trade Agreement. While the “Beer Wars” continued and trade fights over lumber, steel, yogurt, salmon, and other resources grew into full-fledged disputes, both countries consistently resisted the urge to compound the various issues at the expense of the bigger picture. So today, if a port is affected by a trade dispute, my view is that we too must look first to the bigger picture – and keep building bridges!
