Cablegate: Spp: Can-Am Business Council Shares Views On Next

This record is a partial extract of the original cable. The full text of the original cable is not available.

201750Z Apr 05

UNCLAS SECTION 01 OF 02 OTTAWA 001201

SIPDIS

STATE FOR WHA/CAN:TBREESE, AHOLST; EB/PDAS Donnelly

WHITE HOUSE/NSC FOR FARYAR SHIRZAD

STATE PASS USTR FOR SAGE CHANDLER

HOMELAND SECURITY OFFICE OF THE SECRETARY (MARMAUD, MARTINEZ-
FONTS)

USDOC FOR 4320/ITA/MAC/WH/ONIA (WBastian, ARudman, GWord)

E.O. 12958: N/A
TAGS: ETRD ECIN CA
SUBJECT: SPP: Can-Am Business Council shares views on next
steps for the Security and Prosperity Partnership of North
America

Ref: (A)Ottawa 1104 (SPP Scene Setter)

(B)Toronto 414 (Schwartz Report)

1. Summary: Members of the Canadian-American Business
Council (CABC), a Washington DC based industry advocacy
group, outlined for the Charg their principal concerns that
they think need to be addressed by the SPP. The CABC

underscored the pressing need to quickly build appropriate
infrastructure in southwestern Ontario at New York and
Michigan crossings and suggested creation of a joint Canada-
U.S. body to force rapid action. The CABC members also
noted that southbound cross-border infrastructure barriers
are exacerbated by too few inspectors at the border and
proliferating security policies and procedures compounded by
lack of communication between border agency components.
They argued that these should be addressed under the
Security rubric of the SPP. In contrast, they noted that
northbound cross-border barriers do not manifest themselves
at the port of entry but rather are market-wide and stem
from regulatory mismatches that force business to duplicate
health and safety tests or graft a layer of seemingly
unnecessary requirements onto the marketplace; these should
be dealt with by a mechanism under the Prosperity rubric.
The Charg emphasized the need to have industry CEO's

champion SPP initiatives in Ottawa and Washington DC. End
summary.

2. On April 12 the President of the CABC, Shauneen Bruder
(also a Vice President at Royal Bank of Canada) and David
Scott, Senior Partner of the law firm Borden, Ladner,
Gervais hosted Charg Dickson and FAS, FCS, DHS and ECON
section chiefs at a luncheon meeting to discuss the SPP.
Other CABC members present included: Kelly Johnston VP of
Campbell's Soup (based in NJ), Hugh Porteous VP of Alcan
(based in Ottawa), Emile Lindsay VP of EDS Canada (based in
Ottawa), Scotty Greenwood, Executive Director of the CABC
(based in Washington DC) and Lynda Watson, Minister-
Counselor Commercial Affairs at the Canadian Embassy in
Washington DC.

3. The CABC is a fairly young advocacy group headquartered
at DC-based law firm McKenna, Long & Aldridge and until now
principally has served as a voice to raise the profile of
Canadian business among DC policy-makers. CABC members are
attempting to expand their role to act as an advocate for

cross-border businesses both in Ottawa and DC and see their
contribution to the SPP effort as moving them in that
direction. Indeed, after the luncheon with Mission staff
the CABC delegation was scheduled to meet with senior staff
from the offices of Transport Minister Lapierre and Trade
Minister Peterson.

4. When asked by the Charg to identify concrete action that
CABC would like the GoC to take Bruder, Johnston and
Greenwood all underscored the point that the border crossing
infrastructure is inadequate to meet the demands placed on
it and that the GoC could address those shortcomings by
acting on the so-called Schwartz report commissioned by the
city of Windsor (Ref B). Bruder and her delegation expected
to voice their support for the Schwartz report
recommendations during their meeting with Minister
Lapierre's staff. Greenwood also briefly noted a CABC draft
policy paper whose principal recommendation to the two
governments is to create an international body (she likened

it to the International Joint Commission), that could
overcome NIMBYism and force concrete action by state,
provincial and local stakeholders (although various
stakeholders have cautioned CABC that this particular
approach is far too ambitious.)

5. Johnston of Cambell's Soup Company argued cogently that
the infrastructure shortcomings are exacerbated by lack of
U.S. inspection personnel at key crossings. In particular
Johnston noted that: there are too few USDA inspection staff
available at crossings into NY and MI from ON, which leads
to long wait times at ports of entry for their trucks with
frozen soup concentrate; and also that different policies
and procedures employed by CBP and USDA lead to confusion
(he gave the example of CBP not re-sealing inspected
containers whereas USDA does).

6. With respect to FAST and CT-PAT programs intended to
speed commerce across the border, Johnston, Greenwood and
Bruder said that many participants have begun to question
the value of their participation as DHS presses them to
extend control even further back up their supply chains.
Despite considerable investment in CT-PAT, they find that
congestion at the border still leaves their trucks sitting
in queues, largely due to infrastructure limitations (for
example, no dedicated approach lanes well before the port of
entry) but further compounded by, according to them, rapidly
changing policy and procedure by U.S. inspection personnel
in the field. We were told that Daimler-Chrysler and CABC
made this complaint to senior DHS and NSC staff at a meeting
the week prior.

7. The CABC members suggested that infrastructure and
inspection solutions must be found by thinking "outside the
box"; and praised innovative ideas like having private
companies pay for infrastructure improvements as has
happened in a few instances on the southern border.
Johnston of Campbell's Soup expressed interest in paying to
have U.S. border inspection personnel perform inspections at
their plants.

8. With respect to barriers to northbound commerce, the CABC
group indicated that Canadian port of entry delays are much
less of a factor than the various technical barriers
encountered in the Canadian market, principally due to
regulatory mismatches with the United States. They trotted
out the familiar cases of different food fortification
standards in the two countries and restrictions on the size
of baby-food containers (soup cans apparently face similar
restrictions). They are heartened by the SPP emphasis on
reducing these barriers but did not advocate a specific
course of action.

9. More strategically, the CABC group noted that with
respect to the Prosperity Agenda that they are interested
in: ensuring harmonization of IPR regimes in the two
countries and ensuring that research and development across
North America be exploited most effectively to ensure North
America's competitiveness vis--vis the EU and Asia. Again,

it appears it is too early for them to offer a specific and
detailed course of action.

10. Comment: CABC like many other groups we have heard from
are first of all encouraged that there is a process underway
to take into account their views on those items which
require fixing for those engaged in cross-border
business. They also have a checklist of items that we are
hearing from other groups - build new infrastructure,
consolidate processes and facilities, address shortages of
staffing. End comment

Dickson

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