U.S. Rep. Peters Announces DHS Secretary Visit, Plan Roundtable on Trade, NITC Customs Plaza

April 17, 2014

Yesterday U.S. Rep. Gary Peters announced that Department of Homeland Secretary Jeh Johnson will visit Michigan to “discuss the importance of constructing proposed customs plazas at thigh volume trade crossings like the Detroit-Windsor border.”  (MILive, The Detroit News, and The Detroit Free Press offer good reports on the news.)

In the press release, Peters shares his plan to hold a roundtable with Secretary Johnson.  The topic? Securing construction funds for a customs plaza for the New International Trade Crossing (NITC), a planned bridge crossing between Detroit and Windsor.  (Note:  While authorized by the U.S. State Department, MLive reports here on outstanding land acquisition issues.)

Will the idea of a joint Canada-U.S. NITC customs plaza come up?  

And shouldn’t the roundtable also discuss Beyond the Border (BTB) Action Plan and Regulatory Cooperation Council (RCC)?

From Rep. Peters’ press release:

Peters expects to convene a roundtable discussion with Secretary Johnson and other local leaders and stakeholders to discuss the importance of these projects and the best steps going forward to secure funding.

In February, Peters introduced the Customs Plaza Construction Act of 2014 , to construct Federal Customs Plazas at critical trade crossings like the New International Trade Crossing (NITC) at the U.S. – Canada border and Port Huron. Peters’ legislation prioritizes funding for trade crossings with the highest trade volume by value of shipments, including exports and imports. The Detroit – Windsor crossing and Port Huron crossing rank number two and four, respectively, in trade volume for land ports of entry in the United States. Peters’ measure seeks to fund these critical customs plazas on the northern border to increase trade, create jobs and grow the economy in the state of Michigan. Funding for both the Detroit and Port Huron border crossings would be prioritized with passage of Rep. Peters’ measure.

The proposed NITC calls for a six-lane bridge spanning the Detroit River between Detroit and Windsor, enhancing a vital trade corridor by linking I-75 and I-94 in Michigan to Highway 401 in Ontario. The Government of Canada has agreed to fund construction and land acquisition of the $2.1 billion project, per an agreement with the State of Michigan to be repaid by tolls. This project will play a critical role in creating jobs throughout the Midwest and increasing U.S. exports.

Canada’s IP Doctrine Yields “Absurd Results”? One U.S. Pharmaceutical Thinks So, Awaits Results of NAFTA Arbitration

April 15, 2014

After failing in Canadian courts, a major U.S. pharmaceutical company, Eli Lilly, is taking Canada to NAFTA arbitration over their patent rights to two drugs.  The case will help define when companies’ IP interests trump nations’ public interest concerns.

WSJ offers readers on update on the case, stressing growing U.S. political pressure on Canada’s to change it’s take on intellectual property (IP) rights.  But a 2014 International Law Association case summary proves much helpful to understanding the case–even if it pours cold water on WSJ‘s riveting, multi-million Canada-U.S. dispute narrative.

From WSJ:

The drive is getting results. Last week, a bi-partisan group of 32 lawmakers obliged the drug maker by signing a letter urging the U.S. Trade Representative to  reinforce Lilly’s request. Seven of the lawmakers are from Indiana, where Lilly is based.

The moves come several weeks after the Pharmaceutical Research and Manufacturers of America trade group also asked the U.S. Trade Representative to elevate Canada’s status in its upcoming annual report about trading partners and intellectual property rights. A PhRMA spokesman, however, declined to say which, if any, other drug makers singled out Canada before the trade group submitted its views. Canada’s Department of Foreign Affairs, Trade and Development did not respond to a request for comment.

Lilly has been battling Canada for some time. Last fall, the drug maker filed for arbitration under the rules of the North American Free Trade Agreement and sought $500 million in damages in hopes of forcing Canada to alter the way patent rights are administered. The drug maker is pursuing an investor-state dispute which, under international trade treaties, allows companies to initiate claims against foreign governments.

Lilly argues that Canada violated obligations not only under NAFTA, but also the Trade-Related Aspects of Intellectual Property Agreement and the Patent Cooperation Treaty by allowing generic rivals to challenge patents without providing sufficient evidence of utility or usefulness.

The patents in question pertain to the Strattera attention-deficit disorder pill and the Zyprexa antipsychotic treatment, which were invalidated by Canadian courts in 2010 and 2011, respectively, after Canada implemented a doctrine for determining intellectual property rights. In its filing, Lilly contends the doctrine produced “absurd results”and also accused Canada of expropriation.

The International Law Association has an excellent summary and viewpoint on the case as well (page 8):

Recently a major pharmaceutical originator company (Eli Lilly) has initiated dispute settlement against Canada under the NAFTA for an alleged taking of patents. The claim is that by adopting and enforcing a particular interpretation of the criterion of utility, the courts of Canada have engaged in an act of expropriation. This is an extraordinary challenge to the sovereign courts of Canada, and to the way in which intellectual property law has traditionally developed, including in the United States, EU and other industrialized countries. Neither the TRIPS Agreement, the Paris Convention on the Protection of Industrial Property nor the NAFTA define the way the criterion of utility is to be implemented or interpreted. The rule that has been adopted by the Canadian courts is an eminently reasonable one (the so-called “doctrine of sound prediction”). Although Eli Lilly’s cause of action borders on the far-fetched from the standpoint of international IP law and customary international law, if it were to succeed it would transform the way international IP law is governed.

While this case could be used to highlight Canada-U.S. tensions, it also highlights the strength of the bilateral partnership.  Canada and Eli Lilly consented to arbitration.  And this dispute will help prevent future trade squabbles, making for a more efficient and orderly Canada-U.S. trade relationship.

Now whether an effective arbitration system can work three years after the alleged trade law infraction is another question.  But that time frame is actually pretty fast.  Just look at the WTO Shrimp-Turtle case.

Will the New Detroit-Windsor Bridge Crossing Have a Joint Canada-U.S. Customs Station?

April 14, 2014

Maybe.  But there are complications.  And is this only happening because the United States appears to be dragging it feet when it comes to funding a U.S. customs station for the future crossborder crossing?

From CBC‘s report last Friday:

The idea of a single mulitmillion-dollar customs plaza built on one side of the new international bridge that will connect Windsor, Ont., and Detroit has been floated and is getting support from border experts.

Anderson said Windsor has “a great deal of land of the Canadian side” of the proposed bridge.

“If you were going to do something like this, this is the best opportunity to ever come along to do it,” Anderson said.

Robertson said a single plaza would be “probably on the Canadian side.”

Anderson called the single plaza “difficult,” but “not necessarily insurmountable.”

Anderson said the single plaza should be built for the right reasons, though.

“I would hate to see it done because there isn’t money to build the American plaza. I think it should be done because it’s a good way to operate the border,” he said. “Ultimately, I think the Americans should be expected to build a plaza on their side.”

But not everyone is thrilled about the proposal:

Windsor West NDP MP Brian Masse, the party’s border critic, said a single plaza “sounds simple, but it actually is very complicated. It has been done in other areas. There’s actually joint border crossings across Canada and the United States, but this is very unique because of the volumes that we have and the types of things that we have going back and forth.”

CBC, G&M, and Maclean’s Dish on Bruce Heyman: But Are They All Missing the Real Story?

April 11, 2014

By Keith Edmund White

Bruce Heyman has taken his post, and is generating headlines across Canadian newspapers.  But is the coverage focusing on the right issues that will determine Heyman’s  effectiveness in his new post? 

Update 4/14/14:  In fairness, this CBC article does highlight more than Keystone to the Canada-U.S. relationship.  But still, it seems spurring effective crossborder law enforcement efforts and speeding up all pre-existing bordercrossings are areas where an effective ambassador could help move the ball more than Keystone.  And is oxycodone really holding up BTB and RCC?

CBC, G&M, and Maclean’s (courtesy of The Canadian Press) all dish on Bruce Heyman.

While they all focus on important aspects of the Canada-U.S. bilateral relationship (copyright, Keystone XL, the long delay in getting a new ambassador), they miss all the smaller issues that dominate the day-to-day management of the Canada-U.S. relationship.  What are these issues?  Progress on the Regulatory Cooperation Council (RCC) (from meatcut regulations to environmental standards), enhancing border security and trade through the Beyond the Border Action Plan, and making sure our various (big and small) land-crossings have the customs stations they needGreat Lakes water-trade continues in the face of changing water levels and harsh winters, and cross-border policy issues are being addressed.

It’s these smaller items that may have more to do with enhancing the longterm value of the Canada-U.S. bilateral relationship than today’s headline-dominating issues.

And it’s these smaller items that a skilled ambassador can make a difference on.

Read more on G&M‘s positive-spin coverage and Maclean’s harsher take below.

G&M gives a nice bio on Heyman, keeping a positive and upbeat tone on the Canada-U.S. relationship while mentioning the Keystone XL divide:

In his first interview since taking office, Mr. Heyman, a 33-year Goldman Sachs veteran and major Democratic Party fundraiser, told The Globe and Mail he’s here to do business by promoting trade and investment. He vowed to get personally involved in deal-making and sees his priority as promoting trade in both directions.

“I think I can be helpful in that, especially across borders, when there are opportunities to do foreign direct investment, and when there are opportunities for trade,” Mr. Heyman said. “I think I can inject myself, and be an advocate for outcomes.”

And what matters is growth, not in which direction trade is flowing, he said: “I am an agnostic about whether there is more trade going north or more trade going south. I just want more.”

He promised to engage with state governors, provincial premiers and business people to make that happen in his first months on the job: “I’m going to call as many of them as I can … as early as I can,” he said.

It’s an emphasis that fits the background of the investment banker, who now finds himself in a very different, diplomatic world. Mr. Heyman, 57, and his wife, Vicki, a former Obama fundraiser and campaign official, have been in Canada for just over a week. On Tuesday, Mr. Heyman presented his credentials to Governor-General David Johnston, and had his first meeting with Prime Minister Stephen Harper, before speaking to The Globe and Mail at the ambassador’s residence.

Mr. Heyman’s interest in business deals should make him the kind of Obama envoy that suits Mr. Harper – who has instructed Canadian diplomats to focus more on business. Trade often tops Canada’s agenda with Washington.

Mike Blanchfield take a harsher cut, noting Heyman has “nothing new to offer” on Keystone, noting the 9-month absence of a U.S. ambassador to Canada, and highlighting expert commentary suggesting Heyman’s role would be limited as he is serving a lame duck U.S. president.  From Maclean’s:

[Centre for International Governance Innovation Canada-U.S. expert Fen] Hampson said Heyman’s effectiveness as an envoy will be limited because he serves a “lame duck” president.

“That could change depending on the outcome of the congressional elections, but if Obama loses the Senate and Republicans dominate both houses of Congress, then we will see a truly hobbled presidency,” said Hampson.

Republicans, not Democrats, are more closely aligned with the Harper government’s priorities, particularly the Keystone pipeline, he added.

RCC News: U.S. Seeking Comments on Wholesale Meat Cut Regulatory Revisions

April 11, 2014

In February, BTBObserver reported on Canada and the United States announcing aligned wholesale meat cut labeling regulations.  While technical, Canada and the United States trade $2.5 billion annually in just red meats.

Earlier this month* the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) released the proposed regulatory changes, and is now seeking public comments.  (Check out page 59 of one of the four labeling series that AMS is seeking to change, and you’ll see just how extensive these voluntary industry specifications are.)

From USDA’s AMS website:

AMS is seeking comments on the following IMPS Series: Fresh Beef, Series 100; Fresh Lamb, Series 200; Fresh Veal, Series 300; and Fresh Pork, Series 400. The revised voluntary specifications were developed through a cooperative effort with U.S. and Canada meat industry stakeholders, the North American Meat Association Meat Buyers Guide Committees, the Canadian Food Inspection Agency, and the AMS Livestock, Poultry and Seed Program.

These are the first revisions made under a recent bilateral agreement known as the United States and Canada Regulatory Cooperation Council (RCC) initiative. This RCC initiative is aimed at harmonizing meat cut nomenclature between the two countries and facilitating trade.

The revisions bring the IMPS in line with current industry practices and marketplace offerings for meat cuts. Other revisions include updated document appearance and clarifications to Material Requirements and Purchaser Specified Options. The current drafts are available for review at the links above.

The entire IMPS series includes eleven documents addressing meat handling, refrigeration, and packaging; code referenced descriptions for beef, lamb, veal, pork, goat, variety meats, sausages and cooked meat products; and quality assurance provisions recommended for use by any quality control activity.

*Thanks to the Trade Administration (ITA) for alerting BTBObserver to this exciting RCC news.

Great Lakes Round-Up

April 10, 2014

One of the most impressive aspects of the Canada-U.S. bilateral relationship is the successful joint management of the Great Lakes.  With a $1 billion-a-year fishing industry and 200 million tons of cargo shipped annually, the Great Lakes are a critical part of both nations’ economies.  Check out Great Lakes-related news below.

Weather Shuts Down America’s Largest Steel Factory.  thespec.com reports on how the rough Midwest winter has clogged the Great Lakes waterways with ice, leading to the week-long shut down of Gary Works steel mill.  Yes, even icebreakers have their limits.  (Read more at CBC.)

U.S. Ups Dredging Funds, Canada Eyes Water Levels.  Learn more about the mechanics of dredging–and what the Army Corps of Engineers does with dredged material.  While dredging needs dominate U.S. headlines, in Canada it’s about water levels.

Great Lakes Restoration Initiative’s Sinking Funding.  Founding for this interagency action plan to clean up toxic areas, protect environmental habitats, and enhance outreach endeavors has seen it’s funding slip since 2009 from $475 million to $285 million.  Perhaps updating the 2010 action plan would be helpful.  And if you go to Page 39 of the report, you’ll see just how valuable Canada-U.S. partnership is to a thriving Great Lakes region.

More Information.  Oh, P.S., keep an eye out for emerging efforts and work from the Council of the Great Lakes Region–a fabulous new organization–and learn more about Great Lakes Canada-U.S. management at the International Joint Commission, the binational organization that regulates the Great Lakes water use.


US Pushes Canada on Privacy and Agricultural Market Access

April 8, 2014

The Office of the United States Trade Representative (OUSTR) is on Canada’s case.  At least Canada is reporting it’s first trade surplus in five months–with exports at levels not seen since 2008.

Huffington Post recycles some old news on U.S. efforts to loosen Canadian privacy laws so U.S. firms can have access to Canadian IT contracts.  Whether privacy laws represent prudent restrictions on trade or protectionist measures is likely in the eye of the beholder.  (BTB aside:  Different privacy regimes in Canada and the United States also impact the Beyond the Border (BTB) Action Plan.)

And thespec.com provides an excellent recap of the Canadian issues that came up during OUSTR head Michael Froman’s testimony on the White House’s trade policy last week to the House Ways and Means committee:

The administration’s trade representative provided an update Thursday on negotiations toward a historic, 12-country Trans-Pacific Partnership trade deal.

“On Canada, it’s the only country in TPP that has not yet given us a market-access offer on agricultural issues like dairy and poultry,” Michael Froman told a congressional panel.

“We are pressing them to do so. Because those are important priorities for us… We’re addressing their priorities in a number of ways. And we want them to come to the table as part of an overall package.”

Canada’s supply-management system sets limits on the production and imports of certain products, potentially limiting choices and bargains for consumers while protecting farmers.

Canada has already promised to relax some of the import limits on European cheese in its recently concluded trade agreement with the EU, and the Americans appear to expect similar concessions.

Whether it’s trade deals, privacy regimes, or the long-delayed completion of a U.S. customs plaza at the Blue Water Bridge, the Canada-U.S. relationship continues to be an impressively multifaceted and under-appreciated bilateral relationship

And  Canada just posted it’s first trade surplus in five months–thanks to an impressive uptick in American demand.


Get every new post delivered to your Inbox.

Join 106 other followers

%d bloggers like this: