Dawson Strategic's December Briefing: A TPP Holiday Season

For readers interested in the Trans-Pacific Partnership (TPP), do check out Dawson Strategic's December briefing. Whether on the big-picture, or the leading issues within the TPP talks, the briefing's three articles are must-reads.

One particularly interesting section of Dawson Strategic's December article, The TPP: What's In It For Canada?:

Beyond its defensive interests, the TPP is a central component of Canada’s Asian and emerging markets strategy. Much of 2013 will likely be spent reconciling the trade rule-making interests and capacities of advanced industrialized economies with those of emerging economies such as Vietnam and Peru. Advanced economies like the U.S., New Zealand, Australia and Canada will bump up against each other on issues like investor-state dispute settlement and dairy market access, but there will be relatively few fireworks. In areas like intellectual property and labour mobility, the commitments that Canada is making with the EU are likely to go much deeper than anything we can expect from the TPP.

UOttawa Law Prof Geist Hits Canadian Government's TPP Secrecy

By Keith Edmund White, Editor-in-Chief

Dr. Michael Geist, a leading voice on copyright and UOttawa professor with a syndicated column on technology law to boot, last Sunday hit the Harper government for its lack of transparency over Canada's participation in the Trans-Pacific Partnership (TPP).

The column's main value added for other similar articles: its focus on the content of Canadian public commentary on the TPP and the TPP split in the Canadian business community. From Geist's column:

In addition to tens of thousands of form letters and emails criticizing the TPP, the government received hundreds of individual handcrafted responses that unanimously criticized the proposed agreement.

A review of more than 400 individual submissions did not identify a single instance of support for the agreement. Rather, these submissions typically expressed concern with the prospect of extending the term of copyright or adopting restrictive digital lock rules.

The documents also revealed that the Canadian business community was split on the agreement, with numerous companies and associations identifying concerns about the potential direction of the TPP.

Leading telecommunications companies, including Bell, Rogers, Shaw and Telus, cautioned against changes to Internet provider liability rules; groups representing the blind warned against new restrictions to accessing digital materials; Oxfam Canada worried about the TPP’s impact on pharmaceutical pricing; and the Canadian Library Association expressed fears about a reversal of recent changes to copyright damages rules.

Main lesson:  trade policy always picks winners and losers--the fight is over who they should be.  

Now there is a fair rejoinder to Geist's thesis:  If trade deal talks are ever fully transparent they'll never be concluded, since free trade pits the generalizable benefits of liberalized trade against the deep and particularized interests of a few key economic actors, and Mancur Olson collective action tragedy always wins.   Now was that last statement wildly shallow and profoundly undemocratic?  Yes.

For the sake of balance, I'll highlight (again) Beyond the Border, 2013: Inching Toward a Deal by Colin Robertson in Wednesday's iPolitics.

Afternoon Tea: Canada – U.S. News Wrap

By Keith Edmund White, Editor-in-Chief

Enjoy some mid-afternoon tea, and read about Canada and the TPP, Canada & energy, Ottawa's political misfires, just what the Governor-General does, and DHS cracks down on moose poachers.

Canada and the Trans-Pacific Partnership (TPP).  While Canada joined the TPP as an observer in October, but the ongoing 15th round of negotiations is the first to include Canada and Mexico.  The main focus of the talks, according to Western Farm Press, are sanitary and phyto-sanitary standards [or "food safety and animal and plant health measures"]:

Sanitary and phyto-sanitary (SPS) issues will be the real market access determiners in the talks.  Commitments need to go beyond those made under the WTO, often referred to as ‘WTO-plus’.  The USTR may propose new language making SPS disciplines fully enforceable, including those that go beyond WTO rules.  If they would not be enforceable under TPP dispute settlement, they would not be settled at the WTO because they would be stricter than WTO requirements.

But the National Hog Farmer highlights challenges to Canada’s pork subsidization program:

NPPC President R.C. Hunt added: “In reality, we cannot compete on a level playing field. In the upcoming TPP round, you can bet your bottom dollar we will be putting pressure on Canada to do something about its pork subsidy programs.”   

Canada Energy Updates.  Mondaq delivers, per usual, a helpful primer on Canadian energy updates prepared by Doug Black et al from Fraser Milner Casgrain LLP.  I particularly recommend checking out the On the Horizon section that shows fascinating work to both cut the amount of water used in oil sands energy development and lower GHG emissions from CNRL natural gas production.  Two additions worth mentioning: 

• Prime Minister Harper finalized federal loan support, to the tune of $1 billion (CAN), to support a hydro-megaproject in the provinces of Nova Scotia and Newfoundland and Labrador.  Learn more about the project, and Quebec complaints over the loan, from the Winnipeg Free Press.

• Read from Fuel Fix, reporting on a Manhattan Institute event, on why a strong Canada-U.S. energy relationship, along with Mexico, may just turn the energy market on its head.  Notable panelist:  John Prato, Consul General of Canada in New York.

Misfire Alert:  Conservatives Over-Shoot on Trudeau Alberta Comments, Trudeau Returns (Mis-)Fire On Canada’s Long Gun Registry.  Conservatives kinda-sorta-but-not really plan to drag Justin Trudeau before a parliamentary committee because of poorly chosen words on Alberta and the Progressive Conservative Party.  But, don’t worry, while this move was derided by pretty much everyone, Justin Trudeau shot himself in the foot again—over not resurrecting Canada’s long gun registry.

Governor General David Johnston’s “Invisible” But Important Role in Canadian Trade Policy.  The Globe and Mail offered a fantastic piece last week focusing on the evolving role of Canada’s Governor-General.  (For American readers, the Governor General is the acting head of State of Canada).  Not only does this article show the unique nature of Canada’s constitutional monarchy and parliamentary democracy, it shows a fascinating dimension of Canadian foreign policy—and something alien to the American experience.  From the article discussing the preparations for Governor General Johnston’s visit to Mexico, where he and other foreign dignitaries will join in swearing-in festivities for the swearing in of Mexico’s new president, Enrique Pena of the PRI:

But once the ceremony is over, Mr. Johnston’s hard work begins.

He said he intends to start by buttonholing several of the other 75 foreign leaders at the ceremony to discuss bilateral relations. Then, he’ll turn his attention to increasing two-way trade trade and investment. He also hopes to find more ways to share Canadian expertise in mining, justice, policing and governance.

He is travelling with a sizable entourage of senior officials, members of Parliament, business and education representatives, a judge and several ambassadors.

When he gets back, he’ll be reporting, in detail, straight to the prime minister. The two men speak and share ideas regularly, but after a foreign trip, Mr. Johnston has a formal responsibility to check in.

“When I come back, [I need to] be pretty candid and say, ‘Yep, this is going well,’ or, ‘No, this is not going well and here’s where we have to adjust our approaches,’” Mr. Johnston said.

The governor-general’s trip to Latin America should be the beginning of a larger Canadian attempt to revive its relationship with the region, Mr. Robertson said.

New DHS Initiative Catches Canadian Moose-Poachers.  From New Hampshire’s Nashua Telegraph:

Pittsburg [New Hampshire] shares approximately 56 miles of soft border with Canada; along the stretch are hundreds of Canadian hunting shacks and blinds. Some of the shacks are rudimentary, and others resemble elevated camps, fully equipped with propane heaters, cook stoves and sleeping bunks.

Thanks in part to a federal Homeland Security grant titled “Operation Stonegarden,” teams of officers conducted surveillance of several hunting shacks, as well as foot patrols on the border in the upper reaches of Hall Stream.

TPP Backup Plan? Zoellick, Looking to NAFTA's Success, Pushes an Americas U.S. Trade Agenda for the United State

Zoellick to policy-makers:  "North America can become a new raising power" if the U.S. adopts the right trade approach.  

Former World Bank President Robert Zoellick (and, most recently, head Mitt Romney's national security transition team) pushes an Americas trading block to secure America’s future economic growth, looking to build on the extensive ties between the United States, Canada, and Mexico as a starting block to push closer U.S. trade ties to Brazil.

Could this be Zoellick pushing a back-up plan for the White House should Trans-Pacific Partnership talks falter or delay?

And, before we delve into a condensed summary of the op-ed, could Zoellick's "Americas trade vision" be merged with the in-sourcing phenomenon reported so superbly in Charles Fishman's Atlantic article The Insourcing Boom?

From Zoellick's WaPo editorial:

This is an excellent time to deepen ties. The NAFTA countries should invest in a North American community that would make each stronger at home and around the world. For the United States, a more prosperous, growing, populous, integrated, energy-secure and democratic continental base would enhance private-sector possibilities and national power.

…

North America should work to better connect the trade, sourcing and supply chains in the Americas — and act with hemispheric partners on the next generation of development issues: investment, infrastructure, education, energy, the environment, service sectors, business facilitation, or even democracy and security. 

These Latin American partners can also help shape ideas around the world during a time of great fluidity. Chile, Peru, Colombia and Mexico — all U.S. FTA partners—have created a new Pacific group that is advancing policies for open economies. They can be U.S. friends in a changing Asia-Pacific system, too.

U.S. ties with Brazil are not part of this FTA framework. Yet the current governors of Brazil’s states seem inclined to pursue more interests with the United States, including on energy, inclusive development and democracy. By combining activities with Brazil and partnerships across the hemisphere, the United States could set the stage for economic and security ties among all American democracies.

As the president looks west across the Pacific and is pulled to the Mideast, he also needs a fresh north-south vision. North America can become a new rising power. And the foundation of the future global system can be “Made in the Americas.”

Evening News Wrap

By Keith Edmund White, Editor-in-Chief

So, yes, this is a gross simplification of a BIG BIG week in news.  But we got news at the belly-aches in both nations' legal professions, tax-carping, election-updates, trade, top Canadian fiction, and more!

Canada-U.S. News

Life, death, and taxes…and Extraterritorial Application of U.S. Law in Canada.  Canada and the United States are in tax treaty talks, and it seems like Canadian banks are going to have to deal with the administrative burden of checking if their clients are dual citizens.  The lurking issue: dual citizens in Canada avoiding U.S. taxes.

Canada’s Late Entry to the TPP…Not a Huge Worry, But There’s Still Reason to Worry.  While slamming subsidies U.S. states use to lure companies, and how they hurt Canadian merchants, Peter Clark—in this detailed review of the Trans-Pacific Partnership trade talks, it’s impact on Canada, and the global economy—says (1) Canada doesn’t have much to fear with it’s late arrival to the TPP and (2) concludes:

“It’s far too early to either dismiss TPP as a useless exercise or embrace it as a cure for what ails the global economy. While we see problems now, they can be fixed, with flexibility and compromise. If the TPP is a wine, it clearly needs some ageing before we can properly pass verdict on it quality.”

Canada News

Bye, Bye By-Elections!  Mark Abley, at The Gazette, talks on Monday’s by-elections in Canada, arguing that while Canada’s Conservative lost ground, a united Left is the only way to see a change in Ottawa.  Monday’s by-election results in brief: Conservatives held on to seats in Calgary-Centre and Durham, with a NDP-Green battle in Victoria going the NDP’s ways.

CETA Imbalance?  So What?  Paul Wells, taking note of imbalance concerns regarding Canada-EU trade talks, defends progress on the deal.  And at the National Post, Andrew Coyne gives his thoughts on the “logic of trade negotiations” in general:  “The whole situation is an absurdity.  It’s like a hostage negotiation in which both sides have guns to their own head.”

Moving Out:  Financial Post on the rough road ahead for Bank of Canada governor Mark Carney’s coming move to England; and the Globe and Mail on the importance of vetting cabinet officials and the resignation of Quebec’s environmental minister Daniel Breton. Added-Bonus:  Stephen Gordon at Macleans  on how much credit Carney should get from Canada’s robust post-financial crisis economic performance:

“What I take away from this is that we could have done much worse, but I don’t think we could have done much better. Stephen Harper and Mark Carney were dealt good hands and they played them well.”

Must-Read List.  The Globe and Mail picks the top 23 Canadian fiction books of the year.

Legal News

Going to (U.S.) Law School Worth It!  Lawrence E. Mitchell, Dean at the Case Western University School of Law, defends going to law school in the NYTimes:  

"We could do things better, and every law school with which I’m familiar is looking to address its problems. In the meantime, the one-sided analysis is inflicting significant damage, not only on law schools but also on a society that may well soon find itself bereft of its best and brightest lawyers."

Canada’s Lawyers in Crisis?  The Globe and Mail reports on the state of Ontario’s legal profession: “…it was clear that some of the country’s top legal minds believe their profession is, in effect broken.”

Canada’s Asian Trade Strategy & the Trans-Pacific Partnership

By Thomas H. Au, Staff Writer

Critics concerned that key Canadian interests in intellectual property, pharmaceuticals and agriculture were impaired by ‘sitting out’ of Round 14 of the Trans-Pacific Partnership (TPP) are focused on a relatively insignificant scene within a much larger mural. Rather, the issue is whether the TPP compliments other Canada trade agreements, or if it conflicts with the function and purpose of other bilateral agreements. Only then can we determine whether the TPP is part of a cohesive, beneficial trade strategy in Asia, or a fractured approach that will create confusion for Canadian businesses operating overseas.

First, this piece outlines the calls for a more aggressive Canadian trade strategy in Asia. Second, it discusses the implications of Canada’s lacking a true seat at the TPP negotiating table in Round 14. Third, it addresses other potential bilateral trade agreements with China and Japan. It concludes that the TPP functions as a baseline to expand trade, upon which other more specific trade agreements can be built, such as those with Japan or China.

Calling for a More Aggressive Asian Trade Strategy

In the last six months, there have been increasing calls for Prime Minister Harper to adopt a more aggressive Canadian trade strategy in Asia.[i] The underlying impetus appears to be a perception that “Canada must negotiate solid, ambitious trade agreements...to help replace declining trade with the USA.”[ii] However, individual initiatives, including the TPP and bilateral trade agreements with China and Japan have received harsh criticism from political opponents[iii] and interest groups.[iv] These mixed messages create a challenging political environment where leaders can be faced with what appears to a “no-win” situation in domestic Canadian politics.

Looking Back at TPP Round 14 and Forward to TPP Round 15

Initially, Canada’s so-called “absence” raised the important question of whether it will “lose” by sitting out Round.[v] At the heart of this issue is Canada’s agreement to abide by the texts that have already been negotiated and agreed upon by the nine current TPP members.[vi] However, this absence has not harmed Canadian interests on key issues including intellectual property, pharmaceuticals, and agriculture.

Canada’s “absence” is simply explained by the fact that each negotiating country must first ratify Canada’s participation through their own internal, domestic processes. This process was only completed on October 9, 2012.[vii] Now that Canada has formally joined negotiations, the key is to look forward towards Canadian goals and aspirations for what the TPP should look like in the end.

TPP: A “High Standard” Trade Agreement In Canada’s Interests? 

Some Canadians have raised concerns that not only is the TPP mostly beneficial to the U.S., but that the TPP is redundant in light of other Canadian trade agreements.

First, many consider the U.S. to be the driving force behind the TPP’s most restrictive obligations.[viii] Of the nine countries currently negotiating the TPP, the United States has some of the ‘highest’ levels of regulation across a number of economic sectors. Likewise, the United States is well known for viewing the TPP as a vehicle for a “state-of-the-art” or “high standard” trade agreement.[ix] While not confirmable, the inference that could be drawn is that the United States may attempt to use the TPP either to develop unique “high standards” (think not of NAFTA-2, but more likely something akin to a next generation Paris[x] or Berne Convention[xi] or to conform the rights and obligations available in other nations with those available under existing U.S. law. This has created political friction in Canada. Critics are concerned that participating in a “high standard” agreement means radical changes in Canadian policies, ranging from “drugs [pharmaceuticals], copyright, [to] environmental and public health rules.”[xii]

Second, some dispute that the TPP actually adds any benefit that Canada does not already receive through NAFTA or other bilateral trade agreements (consider Chile and Peru).[xiii] Simply, NAFTA already includes the United States and Mexico, which “make up the lion’s share of the TPP” in terms of market size and trading power.[xiv] This leads to a legitimate question: “How much more free access can yet another [multilateral] free trade agreement provide?[xv]

While the draft texts of the TPP are not public, official statements from the United States do not suggest that any extensive agreements were reached on the issues most pressing for Canadians. For instance, the United States Trade Representative’s press release on the Leesburg Round noted “progress” on issues including market access, customs, rules of origin, technical barriers to trade, sanitary and phytosanitary standards, cross border services, telecommunications and government procurement.[xvi] However, the release only reported a “continued focus” on intellectual property issues.[xvii]

If more extensive agreements had been reached on intellectual property rights, it is likely that these issues would have been listed in the first “progress” or “mov[ing] forward” statements. This suggests that no major agreements were reached regarding intellectual property rights. On the other hand, it is not clear from this statement what types of agreements where reached regarding key Canadian agricultural products, such as dairy, grain, and (loosely defined) lumber. Again, while pharmaceuticals were not directly mentioned, it is unlikely that any significant progress was made on these issues. However, pharmaceutical issues are frequently addressed as a component of intellectual property rights, or even investment or manufacturing (depending on how one wishes to address these issues). This should relieve Canadian concerns, indicating that Canada still has time to make its positions clear and exert significant influence over the outcome of the TPP.

TPP Negotiations: Multilateral, Bilateral, or Other? 

On September 24, 2012, the Office of the USTR held a hearing regarding Canada’s entry into TPP negotiations.[xviii] While seen as a forum for discussing specific interests and objectives,[xix] what is peculiar about the hearing is the official silence from the Canadian government. In fact--during, immediately prior to, and immediately after the 14th Round (as well as the USTR’s public hearing on Canada’s entry into the TPP), there were no official news releases on the subject from Prime Minister Stephen Harper, Foreign Affairs and International Trade Canada (Canadian Ministry), or the Embassy of Canada in Washington, D.C. One would think that participation or comment on these proceedings would give Canada the opportunity to publically advocate for its most important values (for both domestic and international audiences) as well as exert pressure just before Round 15.

In fact, on the eve of Canada’s official joining to the TPP, Ed Fast, the Canadian Minister of International Trade and Minister for the Asia-Pacific Gateway only released a short statement, remarking that “[o]pening new markets and increasing Canadian exports to fast-growing markets throughout the Asia-Pacific region is a key part of our government’s plan to create jobs, growth and long-term prosperity.”[xx]

Canadian Bilateral Trade Agreements with China and Japan 

In Canada’s view, Japan and China are two markets that have remained largely untapped. In 2011, the Canadian-Chinese trade relationship was valued at approximately $46.8 to $65.6 billion USD.[xxi] Similarly, a joint study concluded that a bilateral free trade agreement between Canada and Japan could add $4.4 to $4.9 billion to Japan’s GDP and $3.8 to $9.0 billion to Canada’s GDP.[xxii] While Canada has had a tepid response to Chinese calls to begin a bilateral trade negotiation,[xxiii] Canada and Japan have announced that their first round of negotiations in support of a bilateral trade agreement will commence on Nov. 26, 2012.[xxiv]

---

[i]Don Campbell, Paul Evans & Pierre Lortie, A Coherent Strategy Towards Asia Needed (Sept. 12, 2012), http://www.asiapacific.ca/editorials/canada-asia-viewpoints/editorials/coherent-canadian-strategy-towards-asia-needed.

[ii] Peter Clark, TPP Negotiations Present Far More Questions Than Answer, iPolitics (Oct. 12, 2012) http://www.ipolitics.ca/2012/10/12/peter-clark-tpp-negotiations-present-far-more-questions-than-answers/.

[iii] CTVNews Video, Opposition Grills Harper Over China-Canada Trade Deal,

http://www.theglobeandmail.com/news/news-video/video-opposition-grills-harper-over-china-canada-trade-deal/article4796558/.

[iv] Heather Scoffield, Investment Deal with China Would Leave Canada a Resource Colony: Opponents, Canadian Business (Oct. 30, 2012), http://www.canadianbusiness.com/article/104651--investment-deal-with-china-would-leave-canada-a-resource-colony-opponents; Sheila Harrington, Trade Agreements Costly for Taxpayers, Canada.com (Nov. 2, 2012), http://www.canada.com/Trade+agreements+costly+taxpayers/7487585/story.html.

[v] See, e.g., Inside U.S. Trade, Canada, Mexico To Join TPP Talks In October After Leesburg Round, World Trade Online, August 31, 2012, available at http://insidetrade.com/Inside-Trade-General/Public-Content-World-Trade-Online/canada-mexico-to-join-tpp-talks-in-october-after-leesburg-round/menu-id-896.html.

[vi] CBC News, What Is the Trans-Pacific Partnership? CBC News World, June 20, 2012, available at http://www.cbc.ca/news/world/story/2012/06/20/f-trans-pacific-partnership-explained.html.

[vii] Press Release, Honourable Ed Fast & Foreign Affairs and International Trade Canada (Oct. 9, 2012) available at http://www.international.gc.ca/media_commerce/comm/newscommuniques/2012/10/
09a.aspx?view=d.

[viii] Peter Clark, TPP Negotiations Present Far More Questions Than Answer, iPolitics (Oct. 12, 2012) http://www.ipolitics.ca/2012/10/12/peter-clark-tpp-negotiations-present-far-more-questions-than-answers/ (“The TPP could result in extra-territorial application of U.S. laws, particularly in the Intellectual Property area including criminalization of non-commercial infringement.”).

[ix] See, e.g., USTR, FACT SHEET: The United States in the Trans-Pacific Partnership: Increasing American Exports, Supporting American Jobs, June 19, 2012, available at http://www.ustr.gov/about-us/press-office/fact-sheets/2012/june/us-tpp-increasing-american-exports-supporting-american-jobs; see generally, Banyan, Parners and Rivals, Another Ambitions Trade Agreement Gets Bogged Down, Sept. 22, 2012, http://www.economist.com/node/21563292.
[x] World Intellectual Property Organization, Summary of the Paris Convention for the Protection of Industrial Property (1883), WIPO.int, http://www.wipo.int/treaties/en/ip/paris/summary_paris.html (last visited Nov. 13, 2012). 

[xi] World Intellectual Property Organization, Summary of the Berne Convention for the Protection of Literary and Artistic Works (1886), WIPO.int http://www.wipo.int/treaties/en/ip/berne/summary_berne.html (last visited Nov. 13, 2012).

[xii] Brent Patterson, NEWS: Council Critiques Canada’s Entry into the Trans Pacific Partnership Talks, Council of Canadians, June 20, 2012, available at http://canadians.org/blog/?p=15828; but see UPS, Canada Using Global Trade to Grow Economy, Says UPS COO (June 19, 2012) available at http://pressroom.ups.com/Press+Releases/Archive/2012/Q2/ci.Canada+Using+Global+Trade+to+Grow+Economy,+Says+UPS+COO.print.

[xiii] John Hancock, The Wrong Trade Agreement, Canadian Int’l Council, June 21, 2012, available at http://www.opencanada.org/features/blogs/roundtable/the-wrong-trade-agreement/.

[xiv] Id.

[xv] Id.

[xvi] USTR, Progress Continues in Trans-Pacific Partnership Talks, USTR.gov, Sept. 15, 2012, available at http://www.ustr.gov/node/7751 (emphasis added).

[xvii] Id.

[xviii] USTR, USTR Holds Public Hearing on Canada and the Trans-Pacific Partnership, USTR.gov, Sept. 24, 2012, available at http://www.ustr.gov/about-us/press-office/press-releases/2012/september/USTR-hearing-Canada-TPP.

[xix] See, e.g., John Kelly, Clay Hough Testifies on Canada Joining TPP Talks, IDFA.org, Sept. 26, 2012, http://www.idfa.org/key-issues/category/global-markets/details/7689/.

[xx] Press Release, Canada Formally Joins Trans-Pacific Partnership, Foreign Affairs & International Trade Canada (Oct. 9, 2012), http://www.international.gc.ca/media_commerce/comm/news-communiques/2012/10/09a.aspx?view=d.

[xxi] Economic Partnership Working Group, Canada-Chinese Economic Complementaries Study. 3.4.1, Foreign Affairs & International Trade Canada (Oct. 29, 2012), http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/china-chine/study-comp-etude.aspx?view=d#cn-tphp.

[xxii] Randall Palmer, Canada, Japan to Start Trade Talks Next Month, Reuters (Oct. 29, 2012), http://ca.reuters.com/article/domesticNews/idCABRE89S19320121029.

[xxiii] Paul Vieira, Canada Trade Min: Committed to Deeping Trade/Investment Ties with Canada, WSJ (Oct. 1, 2012), http://online.wsj.com/article/BT-CO-20121001-708453.html.

[xxiv] Plamer, supra note 20. 

President Obama’s Re-Election—for Obvious and Less Obvious Reasons—May Push the Canada-U.S. Relationship to Center-Stage

By Keith Edmund White 

Will Obama’s second term put the Canada-U.S. relationship on center-stage?  A quick round-up of Canadian headlines shows three major issues dominating the post-election Canada-U.S. relationship: (1) in the short-term, Canadian apprehension over America’s ability to reach a debt deal, (2) Keystone XL, and (3) moving forward on the Beyond the Border Initiative.  But let’s not forget two other wrinkles from America’s election night: Heidi Heitkamp’s Senate win and the failure of a state constitutional roadblock to the Detroit River Crossing Project.  And when you add to this Canada’s critical role in the Trans-Pacific Partnership talks, the Canada-U.S. relationship will be getting its fair due during Obama’s second term.

BC’s The Tyee offers a cautious Canadian reaction to President Obama’s re-election.  The article's two chief points: (1) If Obama does not reach a debt deal with Congressional Republicans, who still hold the U.S. House of Representatives, America could tumble into recession, and drag Canada along for the ride; and (2) hope that Obama will clear full construction of the Keystone XL pipeline.  But The Hill calls Keystone XL an energy election-night ‘loser,’ seeing a Romney White House fast-tracking the project.  My guess: with Keystone XL already under construction, I don’t expect the Obama administration to stall Keystone XL’s northern construction much longer.

But, in any case, Heidi Heitkamp’s Senate victory in North Dakota guarantees one strong, Democratic voice in favor of the pipe-line.

And then, of course, one major pit-fall in Canada-U.S. relations was avoided.  Yesterday Michigan voters shot down a state constitutional amendment that would have delayed—and perhaps killed—plans to build a second, bridge crossing connecting Detroit to Windsor over the Detroit River—a project with obvious economic impact in both Canada and the United States, and strongly supported by Canadian Prime Minster Harper.

But one less reported story bears mentioning.  December 2011’s Beyond the Border Initiative (BTB), a Canada-U.S. project to streamline border regulations and bolster border security, might get a jump start.   Birgit Matthiesen offers this BTB post-election update for the Canadian Manufacturers & Exporters:

Over the last four years, Canada has too often benignly neglected by our neighbour. But the next four years presents an opportunity to build a North American manufacturing base. The US business community has a partner in Canada. One-third of our cross border business is intra-company and another third is comprised of intra-industry shipments. Our best ideas are each other's next new product.

The ball is in our court, as it always is when dealing with an American administration. But we do not have to start at square one.

Two initiatives between President Obama and Prime Minister Harper have already been launched – the Beyond the Border Action Plan and the Regulatory Cooperation Council. The ambition is great, but the progress is slow. Now that the elections are behind us, Ottawa and Washington need to get back to the table on these two efforts.

We have a major opportunity right now. 2013 must be the year that celebrates our cross-border partnership and the strength that our industries bring to each other's communities. Obsolete border management policies and unnecessary regulations must be replaced by a modern framework that will protect us from the economic storms ahead.

But, the big story—and not once mentioned on cable news last night—is that an Obama victory will continue progress, without the interruption of a presidential transition, on the Trans-Pacific Partnership (TPP).  As earlier reported on CUSLI-Nexus, Canada may likely play a critical role in ensuring these talks succeed.  And if this massive trade deal succeeds, it will likely—over the medium and long-term—generate more economic growth--and, at times, painful economic shifting--than any stimulus or jobs bill.  Furthermore, how the TPP goes may well portend how the future effectiveness of the World Trade Organization. 

What’s the importance of listing these seemingly unattached policy items?  First, it seems that two big pressure points in the Canada-U.S. relationship—Keystone XL and the International Detroit River Crossing—have (or soon will be) taken care of.  Next, Canada represents low-hanging economic fruit for the United States.  And—after Obama does heavy lifting on a debt deal and a job bill—the name of the White House economic strategy will be (with one major exception) connecting small dots to generate growth.  One major and needless U.S. economic drain?  Canada-U.S. border regulatory burdens that could be eased through smart, cooperative policies.

Now, naysayers may argue the United States has had trouble keeping focus on Canada.   But, if the TPP talks keep moving ahead, the United States simply won’t have this luxury.  Hence, whether pushed by state-specific issues or international trade diplomacy, the Canada-U.S. relationship may just see its fair share of time on center-stage during Obama's second term.