Security and Prosperity Partnership in Canada - A

UNCLAS SECTION 01 OF 02 OTTAWA 001364

SIPDIS

SENSITIVE

STATE FOR WHA/CAN, WHA/MEX,

STATE FOR EB/WAYNE AND DONNELLY, EB/TPP/BTA/EWH

WHITE HOUSE/NSC FOR FARYAR SHIRZAD, DEL RENIGAR, T. SHANNON

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

STATE PASS USTR FOR SAGE CHANDLER

CALGARY PLEASE PASS WINNIPEG

E.O. 12958: N/A
TAGS: ETRD EFIN EIND ELTN ECON PGOV PREL CA MX
SUBJECT: Security and Prosperity Partnership in Canada - A
Mid-term Update

Ref: Ottawa 1104


1. (SBU) Summary - From a distance Mission Canada is
heartened by the effect and attention given to the SPP in
Washington, throughout our government. We are hearing from
Canadians most affected that this is precisely what is
needed. Because of the political situation now in Canada,
we can afford to be more ambitious than they can, but by
setting up the process and the timelines now, they should
have more room for ambition down the road. We sense the
biggest impact on both the security and prosperity side
would come from consolidating and simplifying the
proliferation and at times redundancy of existing programs,
existing processes. We will send by septel two reports with
more detailed views on the proposals in each of the security
and prosperity goals. End Summary.
Canadian Perspectives

2. (SBU) Broadly speaking, Canadians are unfortunately
unaware of the SPP; they remember the Crawford/Waco meetings
but did not focus at the time on the initiative. Since
then, the country and its political class have been
understandably distracted by political crisis to do much
public promotion. When they have discussed it publicly,
they have at times misinterpreted it, for example saying
that this will be used to fix trade dispute mechanisms.
Those most aware are those border business groups and
academics following the bilateral relationship.

3. (SBU) The most consistent message we are getting from
these latter groups is an imperative that we use this
process to be ambitious. There is a scepticism that this
initiative will tackle the issues, particularly in the areas
that matter most - reducing border delays, cumbersome
processes and regulatory differences.

4. (SBU) Our Canadian counterparts seem to be organized more
centrally than we are; the Privy Council has farmed out the
working groups to the Ministries to a much less extent than
we have. In fact, they have made clear that the only way
they feel these short timetables can be met is through a NSC
and HSC close engagement with the process and close contact
with them. In addition, they see this as an opportunity to
advocate again for items we thought were long gone from the
process.

5. (SBU) Canada is preoccupied with its electoral situation
right now. There is little certainty that there will be
elections and on who might win. Those actively involved in
the SPP process are not distracted, but know that their
political leaders on whom they will rely for decisions will
continue to be cautious and avoid anything that looks like
they are giving in to the Americans.

6. (SBU) For our part, we see little point in trying to work
in to our SPP calculation any predictions of their electoral
timetable since it seems to change daily. An election could
come as early as late June/early July, but could also slip
to the late fall. Since the required time from a no-
confidence vote to an election is around six weeks, it might
be best to simply move forward as though nothing was
happening and adjust to the political situation as it
unfolds.
Broad recommendations

7. (SBU) At the border, people face a proliferation of
programs, seemingly in perpetual evolution, and a lack of
consistency from one port of entry to another. Canada has
fast cargo programs; we have different ones; the
requirements change. Canada has expedited traveler
programs, and we have different ones; NEXUS cards which work
at ports of entry in Ontario can't work in New Brunswick or
Manitoba. New passport requirements, new air travel advance
passenger rules, separate background checks for NEXUS Air
and Nexus land all add up to mounting frustration. People
are telling us governments are moving in the opposite
direction of their citizens who are becoming more
interconnected.

8. (SBU) Our first recommendation: simplify. Use this SPP
process to focus on consolidating and integrating - the
various NEXUS programs, the working groups, the watch lists,
cargo-security programs. Realizing this is easier said than
done, it still seems to make sense to reduce and
consolidate.

9. (SBU) Second, the business of crossing the border has too
many steps, and the perception is we keep adding more. The
Guide for Importing into the U.S. put out by Dept of
Treasury runs 180 pages. Businesses most often choose to
hire a broker, who everyone admits is the least efficient
link in the chain. It takes ninety seconds for a shipment
to be released at the border; it can easily take up to three
hours for the broker to do his processing. Canadian small
business groups tell us that many of their members do not
export because it is simply too complex. Expediting
implementation of the new ACE system to provide advance
cargo information over the Internet will make it easier for
small businesses to communicate directly with CBP rather
than through a broker. ACE will also allow for
communications directly between CBP and truck carriers,
unlike now where brokers inform carriers via phone or fax
about the status of their shipments.

10. (SBU) Third, the notion, as expressed in the law
enforcement matrix, of establishing processes to review
points of difference in laws which obstruct our cooperation,
is excellent and which should build on progress already made
by standards and regulatory experts in terms of information
sharing. The aim should be to have domestic standards and
notification requirements converge over time with border
regulations, as well as WTD and NAFTA procedures.

11. (SBU) Fourth, border infrastructure is important in that
it is the principal way to reduce delays and to enhance
security. We see this covered in the matrices, and we will
have to expedite the major improvements in bridges and
tunnels. We would only stress, though, the great impact
from minor changes in the geography, from a parking lot in
Fort Erie or an approach lane in Windsor or building
separate approaches for trucks in Champlain, or the
prospects of moving to short sea shipping opportunities.

12. (SBU) Comment - As we move down the list of action
items, we can hold the Canadians to two points. First, this
was originally their idea, and our Privy Council
counterparts took a pride of ownership after Crawford that
this was originally their initiative under NAI. Second,
they have just released their International Policy Statement
where they have publicly spelled out their highest goal of
advancing their relationship with the U.S. as it is in their
own long-term interests. We see this as a big agenda which
would actually contribute to this own stated goal. Finally,
we should not be surprised if during the upcoming election,
Canadian politicians hold out the SPP as a mechanism for
gaining more control over U.S. trade remedies, e.g., escape
from current or future softwood lumber disputes, and
exemption from U.S. regulatory actions, such as BSE. End
Comment.
Dickson