U.S. envoy says trade with Canada is top issue

The top U.S. envoy to Canada says the trading relationship between the two countries is now the most important international business issue in Washington.

U.S. Ambassador David Jacobson said Tuesday there is "a huge amount of time" being spent on easing trade between the two countries at the highest levels of governmentincluding the White House.

Jacobson was referring to the long-awaited perimeter security deal, billed as an effort to boost cross-border trade and reduce congestion, without compromising security.

The potential economic spinoff of making the border more permeable to goods is massive, he added.

"This is a big deal," Jacobson said as he addressed a manufacturing summit in Montreal. "Particularly in my country people understand that if we're going to move the needle on exports and on trade, and on jobs that are dependent on export and trade, we're going to have a lot more bang for our buck by focusing on Canada."

An announcement on the governments' so-called Beyond the Border initiatives is expected in the coming weeks.

'We want low unemployment rates and high demand in both countries.' Gary Doer, Ambassador of Canada to the U.S.

Once it has been made public, Jacobson said the countries will seek more public input from both sides of the border.

"This is a plan, it's not like some treaty that we're going to sign and it's going to be done," he said, adding there is still a long process ahead.

Jacobson said the countries can have a secure border that's open for "good people" and safe goods to cross.

"For a long time there was a view that we had to choose between security on the one hand and efficiency and trade on the other," he added.

Controversy on sovereignty risks

But the perimeter security deal has also stirred up controversy, with critics saying such an agreement risks a loss of sovereignty and control over personal information about Canadians.

The Conservative government, however, has said both countries value one another's constitutional and legal frameworks that protect privacy, civil liberties and human rights.

The North American neighbours are also working on a parallel project to align American regulatory processes with those in Canada.

Jacobson, who described the cross-border business as the "largest trading relationship between two countries in the history of the world," said smoothing over the regulatory approaches would boost business even more.

Canada's top envoy to Washington also spoke at the manufacturing conference.

Gary Doer said the peformance of the comparatively robust Canadian economy has been drawing lots of attention in the U.S. media.

"Yes, there is some good coverage on Canada relative to the United States," Doer replied, after being asked if that has made his job putting Canada on the U.S. radar screen any easier.

"But ... we want low unemployment rates and high demand in both countries."

As the ambassadors painted a positive outlook for cross-border business, U.S. President Barack Obama's proposed legislation could reignite trade tensions with Canada.

Section 4 of the American Jobs Act, released in full this week, requires that job-creation projects south of the border use only American iron, steel and manufactured goods.

Similar "Buy American" measures sparked tense negotiations between the two countries for much of 2009.

Those familiar with Canada-U.S. trade say the act will either cut Canadian companies right out of the projects or require them to press for waivers.