International Trade and Development

CSG Midwest
Even as the U.S.-Canada border shut down earlier this year to all but trade and the movement of essential workers, the strength and durability of the relationship between the two countries was on display.
“[They] worked as partners to restrict, but not [totally] close, the border,” Chris Sands, director of the Canada Institute at the Woodrow Wilson International Center for Scholars, said during a May webinar for state and provincial legislators.
This cooperative effort (which included Mexico, via a separate border agreement with the United States), he said, was “historic.” And looking ahead, as the border begins to “reawaken,” he views the North American trading relationship as potentially more important than ever before.
According to Sands, one of the likely takeaways from the COVID-19 pandemic will be a push to change supply chains for essential goods such as medical equipment and supplies — away from producers in markets such as China to those in North America. Not only will this be a deliberate policy shift among governments, he said, some manufacturers “will no longer want to put their supply chains at risk.”
CSG Midwest
On a given day, an average of $2 billion in goods and services travels between the United States and Canada. In the middle of much of that cross-border activity: the Midwest’s states and their neighboring Canadian provinces.
The month of March 2020 will be remembered as a historic one in that relationship.
In response to the coronavirus outbreak, the two countries closed all nonessential traffic at the border. Though these rules did not apply to most trade, automakers (central to cross-border trade and supply chains in this region) subsequently shut their factories.
Somewhat overshadowed by these extraordinary actions, though, was the start of an important new chapter in U.S.-Canada trade relations. On March 13, the Parliament of Canada approved the United States-Mexico-Canada Agreement, or USMCA, thus ensuring that this successor to the 26-year-old North American Free Trade Agreement will go into effect. (The USMCA already had received formal approval by the U.S. and Mexican governments.)
CSG Midwest
Recognizing the increasingly important role that state and local officials play in international relations, some U.S. lawmakers say it’s time to boost federal support for these activities. Their idea: Create a new Office of Subnational Diplomacy within the U.S. State Department.
CSG Midwest
After years of court cases, requests for proposals and bidding, work is underway for a new bridge at the busiest commercial crossing along the U.S.-Canada border. Approximately 7,000 trucks — carrying goods worth millions of dollars — already pass the border most days at Detroit and Windsor, Ont. All of these crossings are done now via the privately owned, 90-year-old Ambassador Bridge.
But with the scheduled opening of the Gordie Howe International Bridge in late 2024, a second option will be available for U.S. and Canadian firms.
The bridge (named after the Hall of Fame Canadian hockey player who starred for the Detroit Red Wings) will provide larger, modern ports of entry and customs facilities, while incorporating new technologies to speed up border screenings. And with two bridges up and running, the movement of commercial goods will not be as affected by accidents or other incidents at the Detroit-Windsor crossing.
CSG Midwest
Following more than a year of negotiations, and many days when it seemed as though talks would fail, Canada, Mexico and the United States reached agreement on a trilateral trade pact on Sept. 30. The deal has a new name — the United States-Mexico-Canada Agreement, or USMCA — and some new provisions, but also is notable for what it keeps in place.
“About 70 percent is the same [as the North American Free Trade Agreement],” notes Chad Hart, an associate professor of economics at Iowa State University. “What this means is that the rules we have been playing under for the last 20-plus years have been reaffirmed, and this adds market certainty.”
CSG Midwest
When countries enter a trade war, its effects depend in part on how close the nations are, in terms of geography and their existing economic relationship, Dan Ciuriak, a former Canadian government economist who now runs a consulting firm, told a committee of state and provincial legislators in July.
Few, if any, two nations in the world are more closely knit than Canada and the United States — a fact that would seem to point to major economic consequences if the two countries’ use of tariffs and retaliatory tariffs continues to escalate.
CSG Midwest
Recent headlines have pointed to some of the strains (a mix of new tensions and a flare-up of longstanding conflicts) in the U.S.-Canada relationship. There have been proposed U.S. tariffs on steel, harsh words exchanged on Canadian dairy policy, and threats by President Donald Trump to end the North American Free Trade Agreement.
But dig a little deeper, and a much different story emerges — one of economic interdependence and cooperation in key areas such as energy and the environment.
“The relationship at the provincial-state level is probably as strong, if not stronger, than it has been since the mid-1980s,” says Carlo Dade, director of the Canada West Foundation’s Trade and Investment Centre, pointing, in particular, to the deeper relations built between state governors and provincial premiers.
Canada and the United States share much more than the largest binational border in the world; their peaceful relationship has contributed to economic growth in both countries as well as to the development of an intricate, integrated trading partnership.
“We are moving away from just being trading partners; now we are business associates that build things together and sell the finished products both domestically and around the world,” notes Christopher Sands, director of the Canadian Studies Program at the School of Advanced International Studies at Johns Hopkins University.
This thriving cross-border supply chain is one of several critical pieces of the U.S.-Canada relationship, and much of it is centered in the Midwest.
CSG Midwest
When President Trump announced that he intended to levy a 25 percent tariff on imported steel, and a 10 percent tariff on imported aluminum, U.S. trade partners were surprised — and angry.  
His actions came after a U.S. Commerce Department report found that the unfair “dumping” of steel and aluminum (exporting these products to the United States at below domestic market value) by other countries was leading to plant closings and job losses. This has been deemed by the Trump administration a threat not only to domestic manufacturing, but also to national security.
At first stating that there would be no exceptions to the tariffs, Trump stepped back from that position by the time of his formal declaration. He exempted Canada (the largest exporter of steel and aluminum to the United States) and Mexico from the tariffs, at least temporarily.
For the many integrated industries in the Midwest that rely on cross-border trade, such as the auto sector, this exemption was particularly important. 
CSG Midwest
Negotiators from Canada, Mexico and the United States have begun their seventh round of discussions for a new, or modernized, North American Free Trade Agreement. And while the dissolution of NAFTA seemed very likely several months ago, negotiations are still alive.

Dear SIDO Colleagues,

Welcome to the 2018 SIDO Washington Forum! Thank you for making the trip to our nation’s capital and we’re looking forward to an exciting couple of days. On behalf of our SIDO leaders, we sincerely appreciate your participation in our Washington Forum and for your ongoing support. For those who are not yet members, we would encourage you to become a member. Please feel free to reach out to me or any of our board members if you are interested.

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