by Keith Edmund White
This panel was a round-table discussing regulatory harmonization efforts between the two countries.
- Moderator/Questioner: David R. Kocan, Managing Director, Canada-U.S. Law Institute
- Laura Dawson, PhD, Dawson Strategic
- Kelly Johnston, In House Counsel, Campbell’s Soup
- Chris Sands, Senior Fellow, Hudson Institute
Key Themes:
(1) Regulatory differences matter. There are clear regulatory differences between our countries that impend cooperation. Laura Dawson, by showing her Canadian phone and American phone, show that each countries' different standards lead to different types of phones being common in each country. And with the impressive roaming charges that apply from a call from Detroit to Windsor, but not L.A. to D.C., we're dealing with a regulatory system that keeping false barriers between us. Another example, that a worker had to have a separate boot requirements on each side of the border (and this was a private sector regulation).
(2) Regulators aren't the problem. Kelly Johnston, admittedly some listeners might be surprised, that regulators are actually working to push cooperation.
(3) There are bad regulations we'll have to deal with. We need to (a) implement risk management in both countries' regulatory systems and (b) have this operate in a time of small, leaner government. Chris Sands pointed out that, particularly in America, many of our regulations are built on unrealistic expectations of safety.
(4) Will the U.S. keep focusing on the few outstanding issues, and what about Mexico? Regulatory alignment with the United States is something Canada has to do. Most of our exports still go to Canada, and therefore Canada is definitely. 90% of our standards are aligned. But how long will the United States focus on Canada on the remaining issues, especially since other trade-relationships aren't as attention-grabbing. And Chris Sands points out that America needs to ensure Canada has a voice in the harmonizing regulatory systems. And, as Dawson added, the U.S.-Mexico regulatory harmonization effort and the U.S.-Canada regulatory harmonization are now on separate tracks. This raises an important question: is doing a bilateral harmonization efforts really the best way forward? And even if it isn't, are we stuck with it?
(5) Canada and the United States need to scrap bad regulations. With U.S. and Canada already hosting some of the world's highest labor costs, Johnston and Dawnson emphasized the need for duplicative and excessive regulations to be change. If not, the United States and Canada will continue to see lower-cost manufacturers (re: China, India, etc.) "eating our lunch", and that isn't going to help either country economic welfare.
(6) Is self-regulation the way forward? Johnston pointed out that often the government often comes to the private sector to figure out standards on their own. But Dawson pointed out that if we want to lean on the private sector--which in an area of budget cuts and wanting to get the most knowledgeable people making smart regulations--we need to work on creating U.S.-Canada forums to do self-regulations across the border. And Chris Sands pointed out that the private sector is incentived to push for global standards that help them sell their goods quickly, and--often--will work faster to get theses standards finalized and operationalized.
And one last issue: environmental sustainability? The government isn't doing virtually anything on this issue in the United States. But guess what, Johnston asked, Walmart is doing more for sustainability by asking questions of the manufacturers who wish to sell their goods in Walmart.
(7) What's needed: Common framework for regulators to communicate, which then should bring in interested parties. The problem, Johnston pointed out, is that Canada and the United States regulators rely to much on ad hoc cooperation, which by its nature can only bring limited success. But Chris Sands pointed out that formalizing such a process requires bringing in the courts and Congress. But regarding Congress, more so than Parliament, there's always the risk of interest groups hijacking the process. And we also need to change the administrative procedure act to allow Canadian companies to have a voice through regulations so that their voice is heard, and the Courts are defending the 'fairness' interests of both Canadian and American businesses impacted by regulations.
(8) What's the impact of the emerging EU-Canadian free trade deal? Johnston pointed out that there are important impacts, such as location markers that for example would not allow Kraft cheese to have 'Parmesan' cheese. But as Johnston added, what does this matter if America can't compete with European goods in Canada?
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