Build the future by building trade corridors

Over the past five years, the value of Canadian exports to the United States averaged $338.2-billion per year, while U.S. exports to Canada were $291.3-billion, making total export trade between the two countries roughly $1.7-billion per day. More than 26% of U.S. exports went to Canada, and more than 80% of Canadian exports went to the U.S. As the late Social Credit leader Robert Thompson famously put it, "The Americans are our best friends . . . whether we like it or not."

Canada's challenge is to maintain and expand the infrastructure necessary to keeping itself accessible to the world and, especially, the U.S. In its 2004 Throne Speech, the Government of Canada noted that "Canada has always been a trading nation, but never more so than today. It is vital that we secure and enhance our access to markets, both in North America and the world."

The Canada-U.S. trading relationship is by far the largest in the world. To understand its nature, it helps to understand "trade corridors." These are streams of products, services and information moving through communities in geographic patterns according to a "culture" of trade agreements and treaties, statutes and delegated legislation that guide trading relationships, institutions and structures.

Trade-corridor language recognizes that Canada's trade with the U.S. is regionalized, whether it be auto manufacturing, wood products, energy or services. The auto industry is concentrated principally in the Great Lakes region. A dynamic trade corridor has been constructed over the past 100 years to move steel, auto parts, assemblage, and finished products back and forth across the Canada-U.S. border in that region. The physical infrastructure of highways, rail, and the seaway; the legal infrastructure; "just in time" supply agreements; telecommunications; banking services; union contracts; customs and duty and "Smart Border" arrangements; and a host of other particulars constitute what we could call the Great Lakes trade corridor that makes the North American auto industry “go."

Competition for trade can be framed in terms of trade corridors. Europe is now pouring money into the construction project known as the Transport Corridor Europe-Caucasus-Asia. With 100,000 kilometres of road, TRACECA hopes to boost volumes in this trans-Eurasian corridor from 1.9 million tonnes in 1997 to 34 million tonnes by 2010.

Similarly, Asian nations are planning an Asian Highway network, AH 1, also known as "the New Silk Road. " This network will span some 140,000 kilometres of road stretching across Asia to Europe.

Although Canada and the U. S. possess a trading relationship second to none in the world, we cannot take it for granted, at risk of being left behind.

Here are the next steps that Canada and the U.S. should consider:

- Recognize the integrated, Canada-U.S. trade economy is organized on trade corridors -- half a dozen, more or less -- that generally follow natural, regional geography. Infrastructure decisions must support this reality.

- Map Canada-U. S. trade corridors. This requires an enormous interdisciplinary commitment to co-ordinate data, project trade flows, anticipate infrastructure demands, and interface regulatory and government jurisdictions.

- Commit resources -- financial and otherwise -- to building public infrastructure needed to move trade through trade corridors. Simply put, get on with public-private partnerships that will supply the investment needed, enact statutory and regulatory regimes, and hammer out bilateral agreements.

- Encourage the culture of trade. Anti-Americanism is at its least helpful when it proposes to bite the hand that helps feed millions of Canadians. The Americans are Canadians' most important trading partners, and vice versa. When we need to, we can surely disagree without being disagreeable.

On April 25, House Leader Tony Valeri will chair a landmark roundtable meeting of government officials, industry and business leaders, and thinkers from Canada's leading "think-tanks" with a view to moving forward with trade corridors to further Canada-U.S. trade.

At the beginning of the 19th century, the U.S. was little more than a trade backwater to trade and commerce that centred in Europe and connected with the Caribbean basin. At the beginning of the 20th century, Canada was likewise a backwater to the great transatlantic commerce between Europe and the U.S. eastern seaboard.

Today, these two former backwaters are international trading powerhouses, sitting between the two great trading blocs of Europe and Asia. Whether Canada and the U.S. are more than a geographic centre of trade in the 21st century and beyond is up to us.

Financial Post
 Michael Van Pelt is president of the Work Research Foundation and chair of the Trade Corridors Partnership.