The origins of the contemporary Canada--United States exceptionally dense trade flows and close government relations are found in the invention of the automobile, specifically the establishment of Ford Motor Company in Windsor in 1902. At the time, Ford wanted access, through Canada, to the Commonwealth market. Industrial and automotive development in the Detroit-Windsor region took place subsequently. From inception, intra-corporate trade made up a significant part of this trade flow. This trade flow soon justified the Auto Pact of the 1950s, because trade was spilling over and expanding to the rest of Ontario and Michigan. Over time, the widening of trade to the rest of Canada and the United States across diverse industries such as manufacturing, services, and retail supported the Free Trade Agreement of 1989 ("FTA") and the North American Free Trade Agreement in 1998 ("NAFTA").
By 2012, Canada and the United States were by far each other's most important trading partners. In 2011, bilateral trade stood at $689 billion, or about $1.9 billion in daily exchanges of goods and services, and thirty-five U.S. states named Canada as their leading market. Furthermore, the U.S. exports to Canada are the largest trade flows in the world--they are greater than both trade with Japan and Mexico combined. (1) In 2011, the United States supplied 51.1% of Canada's goods imports and purchased 75% of Canada's merchandise exports. (2)
Canadian trade with the United States is larger than its European, Japanese, and Mexican trade flows together, suggesting it is the highest level of integration in the world between two large economies, even when compared to the European Union's Franco--German relationship. The Canadian Department of Foreign Affairs and International Trade estimates that trade with the United States sustains about 8 million jobs. (3)
Free trade has allowed Canadians to secure and develop their grasp on U.S. markets, despite Asian and European competition. (4) Of all the Canadian provinces, Ontario has the highest degree of economic interdependency with the United States, particularly with the state of Michigan. Ontario's trade with Michigan alone surpasses that of all Canadian inter-provincial trade. (5) Ontario, with its population of about twelve million, is Canada's most populous and dynamic province. It effectively exploits its locational advantage at the center of the Great Lakes region and the Northeastern United States, where it is one trucking day from 125 million people, including about 20 million Canadians. (6) In 2002 for instance, Ontario alone contributed about 50% of Canada's GDP; (7) 93% of its exports went to the United States while 11% of its imports came from the United States. (8)
To sum up, Canada and the United States form a highly integrated economic region of the world because of their trading history; since the signing of the FTA and NAFTA, economic integration has progressed at a faster pace than economic growth. Indeed as a result of free trade, the two-way trade between Canada and the United States, with regard to both imports and exports, has increased from $45.6 billion in 1977 to $818 billion in 2010, an increase of 1800%. (9) While both the United States and Canada depend on each other in numerous sectors and for jobs, primary goods and automobiles industries form a unique economic ensemble.
Prior to the September 11, 2001 attacks, trade was the prime driver of Canada--U.S. government relations. In the 1990s, scholars suggested that the primary characteristic of the Canadian--U.S. border, borderlands, and border urban regions, was that it provided an environment facilitating the seamless flow of goods and capital, and, that in essence, it was a border increasingly transparent to trade. (10)
However, it has been argued by many observers that the border has hardened since September 11, (11) and that securitization has had a huge impact on trade, and is now seeping through and influencing all policy arenas that are concerned with and establish borderland policies. Following September 11, both Canada and the United States engaged in discussions over their friendship and the nature of their relations. While economic integration and interdependence was at the forefront of those debates, in the United States, most issues focused on the nature of security on their northern border, while in Canada issues of economic integration raised questions of sovereignty: the idea that 'Security Trumped Trade' was on all lips. (12)
The post-September 11 context was also characterized, in particular in the United States, by fragmented, understaffed and under-resourced agencies, and ill-equipped borders. In 2000, there was fewer than 1,000 staff on the U.S. side of the Canadian border, in contrast with about 10,000 staff on the U.S. side of the Mexican border, reflecting the perception of the Canadian border as safe and transparent. (13)
Indeed, since September 11, U.S. staff numbers have increased three fold at both borders, and, as part of the U.S. response to September 11, the Bush administration initiated a regrouping and recentralization of all major border policy agencies, including border security. In March 2003, the newly created Department of Homeland Security ("DHS") resulted from the merger of several agencies, which involved well over 40,000 staff. (14) Today, DHS staff stands at about 200,000. (15) Also, the border security budget has grown significantly from an initial $8.8 billion (16) to about $31.2 billion for the newly created DHS in 2003, (17) to over $59 billion in 2012. (18) This progression of resources not only illustrates the prioritization of security but also the swiftness of reforms. The 'one face at the border' goal originally set by the White House has been achieved. Customs and Border Protection ("CBP") officers graduate from the same school ("FLECT") where they train to become part of specialized airport inspection, anti-terrorism, and passenger-analysis units.
Also in the wake of the events of September 11, Canada, Mexico, and the United States signed agreements to further enhance their security and protect their trade relations. The first such agreement was the Smart Border Declaration ("SBD"), which I have discussed extensively in the past; it is primarily focused on implementing procedures to secure borders and trade flows. (19) The Smart Border Agreement ("SBA"), however, set the framework of the Canada-U.S. partnership on issues of security, trade, immigration, and firearm or drug trafficking. The SBA became public on December 12, 2001, when Tom Ridge, the U.S. Director of DHS and John Manley, then Canadian Minister of Foreign Affairs met in Ottawa, Canada. (20) In the face of adversity, meeting in Canada symbolized friendship in the implementation of an important agreement, which was then presented as being about securing trade between Canada and the United States. Manley argued that "keeping the flow of people and goods moving efficiently across the Canada-U.S. border" was the central feature of this agreement. (21) Tom Ridge, also insisted "there is no trade-off between our people's security and a trade friendly border. We need both, for in fact they reinforce each other." (22) It is important to note, nevertheless, that Manley talks about keeping the 'flow ... moving' while Ridge insists on 'people's security.' Today, it is clear that the Smart Border Agreement has motivated the creation and numerous networks of public and private security officials that develop and implement the border policy together. Over the years, Canada and the United States have worked closely together to implement policies that focus on flows, i.e. transportation infrastructures and flows of goods and people, and have been able to progressively share intelligence despite on-going difficulties.
Indeed, there are some very successful instances of cooperation; the Canada-U.S. Container Security Initiative Partnership Arrangement, which became the model for the Canada-U.S. Joint Container Targeting at Seaports Initiative, is a key example. (23) This initiative brings Canadian Customs and Revenue officers for training to the United States (Newark and Seattle) and similarly allows Canadians to welcome U.S. officers to Halifax, Montreal, and Vancouver. (24) Together these officials learn to work out pre-screening containers that have other U.S. or Canadian final destinations. (25) Additionally, Canada and the United States have made considerable investments in new scanning technologies, such as the controversial large-scale X-ray imaging systems. They have also increased "the capacity of ports of entry to check seaport containers as well as trains and trucks crossing land border gates." (26) Thus, more containers are being properly inspected with an increase while in 2001 only 7.6% of containers were inspected, this percentage rose to 12.1% in 2003 and may have reached 100% of high-risk containers today. (27) Numbers remain very controversial...