Managing Challenges, Complexity, and Change
Greg Anderson and Geoffrey Hale
As Canada enters the third decade of the twenty-first century, its border-management policies for goods, services, people, and capital remain a complex, cross-cutting combination of measures to facilitate trade, travel, migration, and investment while managing less desirable effects of globalization and the growing great-power competition which threatens to erode the rules-based context for international cooperation in many policy fields. As a result, effective border-management policies contain both “offensive” and “defensive” elements. Emphasis on the latter may respond to domestic interests concerned about the potential erosion of their influence (or rights) within domestic political or legal processes as a result of international agreements, thereby limiting the politicization of domestic debates on trade, investment, and migration issues. However, the varieties of interdependence seen in different policy fields and sub-fields mean that borders can be “fluid” for some purposes, “frozen” for others, and distinctly “slushy” in other areas, as seen from the border effects of the coronavirus pandemic of 2020.
This short volume is intended for an audience of policy practitioners and scholars interested in the pragmatic challenges of real-world policy-making in a twenty-first-century landscape defined by uncertainty and change. We have intentionally kept theoretical, scholarly jargon to a minimum except—as in chapter 1—to locate the discussion of cross-border policy-making within a literature that has evolved from the study of a rapidly changing global governance landscape in recent decades. Scholars have identified and focused on three distinct models of governance, each of which is readily observable in the Canada-US setting and implicitly addressed by the authors in this volume.
1.Intergovernmentalism, featuring a mix of high and low politics, diplomacy, and leadership required for any significant modification of existing regulatory or procedural regimes governing cross-border trade, capital flows, labour market flows, and other major policy fields characterized by substantial interdependence. Stakeholder consultation by governments is usually confined to the traditional domestic aggregation of interests and input to manage support for and diffuse opposition to significant change, although the greater the extent of proposed changes, the greater the need becomes for both societal buy-in and the support of provincial governments whose core interests and jurisdictions are likely to be affected (Doern and Tomlin 1991).
2.(Neo)Functionalism, which includes trans-governmentalism—the internationalization of policy making through the interaction of government agencies and officials—focused mostly on the low politics of administrative implementation, incremental modification to sectoral policies, or technical rule making. This kind of cross-border governance seldom attracts widespread stakeholder interest, and is often conducted between groups (government agencies, civil-society organizations, private-sector stakeholders) with functionally similar expertise, competence, and objectives. Some scholars have pointed to this model of cross-border governance as being more responsive to localized interests in the context of larger externalities pressuring national economies. Others, however, have noted the challenge of transparency and potential for regulatory capture because of the cumulative impact of functional incrementalism.
3.In post-functional (competitive politicized) decision making, scholars have increasingly acknowledged the shortcomings of traditional intergovernmentalism and (neo)functionalism in managing stakeholder interests, particularly those involving competing, domestically focused groups, in evolving cross-border governance regimes. Indeed, the inability of either intergovernmentalism or functional governance approaches to manage negative spillover effects of existing governance regimes, and to mollify the resulting popular resentment, has prompted a renewed search for practical modes of border management.
As demonstrated by the chapters in this volume, border- management policies are rarely “free standing” but instead operate within the broader context of functional policy fields. The greater the similarity of policy objectives, tools, and settings between states—particularly Canada and the United States, its neighbour and largest trade and investment partner—the greater the likelihood of reciprocity and/or parallel national policies which create a positive context for intergovernmental and trans-governmental (i.e., neo-functional) cooperation. The more such cooperation is intended to facilitate the smooth interaction of economic and societal interests across national borders, the greater the likelihood that such cooperation will become formally or informally institutionalized. Ongoing engagement of economic and societal interests most likely to be affected by cross-border policy cooperation generally contributes to the strengthening of cross-border networks and processes which facilitate institutionalization, although some agri-food and resource sub-sectors have remained significant exceptions (Davey 1996; Barriault et al. 2017). Yet context matters, since intergovernmental and functional cooperation is deeply contingent on the practical limits imposed by political contestation.
The greater the institutional differences and policy divergence on particular issues, the more such cooperation becomes contingent and transactional, and potentially dysfunctional, risking the competitive politicization of decision making noted in chapter 1. Managing specific problems on a piecemeal, ad hoc basis in the context of fluctuating domestic and international political considerations frequently narrows the set of choices available to policy-makers. Recognition of shared risks and threats or intervulnerability, the reciprocal risks arising from unilateral actions and subsequent responses, whether in bilateral or transoceanic contexts, can shore up intergovernmental cooperation, and reassert the kinds of neo-functional, below-the-political-radar problem solving that has been a defining characteristic of post-war Canada-US relations.
Governmental, private sector, and other societal interests may recognize and respond to these risks and threats at different speeds, reflecting different levels of vulnerability. Recognition—and particularly responses—to opportunities tend to be much slower, particularly in government, reflecting varied mixes of opportunity costs and prospective (but rarely immediate) rewards.
Most of the policy fields and case studies addressed in this volume give priority to intergovernmental processes in the management of borders: everything that flows across them, transcends them, or shapes the polities divided by them. Each of the cases presented in this volume addresses ways in which risks, threats, or opportunities manifest themselves. The policy processes described, as well as prescriptions for change, are the by-products of both specific contexts of particular policy areas as well as larger trends defining the broad contours of Canada’s overall geopolitical position.
For example, the interaction of regulatory provisions in trade agreements, whether in relation to rules of origin (ROO) discussed by Sandy Moroz in chapter 3, investment provisions analyzed by Greg Anderson in chapter 4, or Meredith Lilly’s analysis of temporary skilled-worker entry in chapter 6, are predominantly intergovernmental in character—if often informed by the efforts of national governments to avoid or manage the politicization of such issues. However, the proliferation of bilateral, regional, and cross-regional preferential trade agreements has contributed to the “spaghetti” or “noodle bowl” phenomenon of overlapping but often inconsistent technical provisions for market access across multiple agreements. Canada’s lengthy pursuit of cross-regional agreements, such as its Comprehensive Economic and Trade Agreement with the European Union (2009–2017) and the twelve-party Trans-Pacific Partnership (2012–2018), had both offensive and defensive elements in anticipation of and response to parallel US initiatives likely to have precedent-setting effects on global economic relations. Hence, Canada’s multiple trade agreements with smaller countries mostly mirror—in scope, coverage, and language—similar arrangements those same countries have negotiated with the United States, except for Canada’s general insistence on the preservation of dispute-resolution processes. It remains to be seen how much the initial US-Japan Agreement of 2019 and a subsequent US-China interim agreement will further complicate supply chains and increase trade diversion (Powell 2019a; Lynch 2020).
The Canadian government’s decision to negotiate mutually agreed border restrictions with the United States in response to the 2020 coronavirus pandemic reflected the need to triangulate public-health and trade-related considerations. President Trump had gradually expanded restrictions on incoming flights from China, Iran, the European Union, and other sources of contagion. The Trudeau government excluded American citizens in its initial decision to close Canada’s land borders, along with restrictions on air travel. This signal enabled bilateral negotiations aimed at preventing the spread of infection from “non-essential” travel, while allowing cross-border shipments for businesses (not least food retailers) able to maintain operations during extended public-health restrictions (Dickson, Walsh, and Morrow 2020)—although significant economic effects are inescapable for many firms and their employees.
As Moroz notes, incentives for other countries to negotiate such agreements with Canada vary with the relative size of their respective markets and trading partners’ potential for market gains through access to new markets, including those of the foreign affiliates of multinational enterprises. Importantly, this generally means a significant interest in access to US markets through Canada, prompting further tightening of American ROO in the absence of reciprocal access to third-country markets. Limiting spaghetti (or noodle) related regulatory indigestion is key motivation for the pursuit of cross-cumulation agreements, and for the preservation and strengthening of broader WTO standards.
Lilly’s chapter emphasizes that a similar dynamic applies to temporary migration agreements between Canada and larger developing/emerging economies. Unlike immigration policies, in which Canada gains ongoing advantage from policies designed to attract and cultivate actual and potential human capital over the long term, she argues that the relative costs and benefits (whether domestic or bilateral) of temporary migration policies are more contingent and uncertain, requiring trade negotiators to update their analytical capacities and approaches to such negotiations.
However, negotiating such agreements—an inherently intergovernmental phenomenon—is one thing; implementing them is something else. Implementation depends in part on clearly defined trans-governmental functions involving administrative and enforcement capacities of individual governments, and their accessibility and transparency for the intended users of such processes. Getting the latter right is often a factor of effective consultation with economic and societal interests who are the intended beneficiaries of such programs.
Moroz points to the importance of verifying ROO compliance at producer facilities—although, in practice, such verification is often contingent on effective integration with the operation of border officials and relevant transport firms. In practice, ROO complexity creates greater compliance challenges for smaller firms, often leading them to forego preferential tariff rates in favour of lower transaction costs associated with higher WTO rates. Kerr and Hobbs identify similar challenges in the absence of outcome/results-based assessments for the operations of agri-food and food-safety NAFTA working groups and their CUSMA successors. Similar challenges have limited the ability of Canadian agri-food exporters to take advantage of the potential for increased access to European Union markets under the Canada-European Union Comprehensive Economic and Trade Agreement, known as CETA (Powell 2019b). As a result, the effectiveness of intergovernmental processes to improve reciprocal market access has been held hostage to trans-governmental processes whose effectiveness is often dependent on the political incentives of regulators in larger markets in their dealings with domestic interest groups and foreign counterparts. These effects may be incidental to differences in bureaucratic priorities. However, when caught up in broader considerations of strategic trade policies and geopolitical competition, they may reflect deliberate choices by larger power to “weaponize” their central positions within international networks (Farrell and Newman 2019), rather than simply establishing bargaining positions for future rounds of trade negotiations.
The relative effectiveness of Canadian regulators in such trans-governmental processes is thus largely contingent on their capacity to build productive personal and professional relationships with counterparts in the United States and other trading partners within the context of their respective legal mandates and strategic objectives, whether in North American or wider international contexts. This effectiveness often depends on regular interaction, Canadian regulators’ ability to understand counterparts’ professional and institutional contexts, and their skill in developing creative processes to navigate institutional similarities and differences. Cultivating such relations and understanding during periods of “business as usual” can make all the difference in laying the foundation for effective cooperation when actual or potential crises surface, with their potential to disrupt trade, economic, or security relations. The benefit of such relational investments within North America has been repeatedly demonstrated in cases ranging from Canada’s responses to 9/11 to the “mad cow” scare of 2003–2005, to rail safety/hazardous cargo issues arising from the 2013 Lac-Mégantic rail disaster in Quebec to cooperative visa screening processes to contain irregular migration flows in 2017–2019, or to ongoing bilateral and wider international efforts to contain the spread of African swine fever. However, far more consistent efforts at capacity and relationship building are likely to be necessary in transoceanic or intercontinental settings in which relations with Canada are peripheral to the interests and strategic objectives of other major trading powers if Canadian governments wish to expand the network infrastructure necessary to support Canada’s trade diversification over the medium and longer term.
The policy overviews and case studies contained in this volume point to an enduring paradox. In most policy fields discussed, the “hidden wiring” (Robertson 2008) of bilateral policy relations and intergovernmental cooperation with the United States continues to function in facilitating border management, even when there is considerable political friction in the relationship. Cultivation of such interests with other trading partners, whether in Europe, East and South Asia, or Latin America, requires more persistent, focused investments of time and resources on issues of common interest and related objects of risk management in order to build the relationships necessary for effective intergovernmental and trans-governmental relations.
Given ongoing political challenges that require constant attention to bilateral relations with the United States, not just in Washington but in cultivating relational networks across North America, future governments wishing to diversify Canada’s trade and investment relations will have to mobilize new resources—inside and outside government—over more than one electoral cycle. One potential model for such activity used by Canadian governments after 9/11 is the “Enhanced Representation Initiative” (Hale 2012, 208–210), which drew funding and personnel from departments and agencies outside what is now Global Affairs Canada, potentially including those of selected provincial governments in areas of overlapping interest, to integrate key departmental initiatives into the activities of Canada’s foreign missions. A second model is the cultivation of academic and think-tank networks in target countries (especially democratic ones) to cultivate understanding of the importance of bilateral relations with Canada and to increase the political and cultural awareness of Canadian officials, businesspeople, and academics of such countries and regions.
One tested variation on the latter model discussed by Patricia Dewey Lambert in her discussion of tourism-policy collaboration among western Canadian provinces and American states are the working groups of the Pacific NorthWest Economic Region—a mixed public/private-sector consortium designed to facilitate ongoing cross-border policy cooperation and regional advocacy. The cultivation of PNWER’s sectoral networks, supported by a stable professional staff over the past quarter century, have contributed to expanding societal engagement with policy-makers and the preservation of institutional memory amid the regular turnover of governments and senior public servants across multiple jurisdictions. Its activities complement (and are further networked with) those of specialized academic institutes, national and regional think tanks, and more specialized sectoral and local networks specializing in specific sets of border issues. Initially, as Lambert notes, such networks rely heavily on policy entrepreneurs and “coalitions of the willing.” However, over time, they provide a framework for the building of intergovernmental and cross-border state/society relations, problem identification, policy research, and their integration with intergovernmental and trans-governmental networks which contribute to effective problem solving and policy cooperation. The institutionalization of such networks also provides a means for leveraging both public- and private-sector funding for shared objectives conducive to public benefit.
Yet, for all of the stability embodied by “hidden wiring,” the promise of forms of networked governance, or the functionality of regional or domain-specific processes, the unevenness of governance mechanisms affecting cross-border flows has recently been most typified by the challenges of transporting Canada’s fossil fuels to market. Indeed, as Gattinger’s chapter detailing the increasingly complex politics of energy (especially fossil-fuel extraction and transportation), recent Canadian governments have yet to find a workable model for incorporating the growing range of stakeholders involved: sub-national governments, private-sector players, environmental activists, and Indigenous communities. Gattinger argues that Canada confronts a MESS (markets, the environment, security, and social acceptance) of imperatives that could possibly be a case in point for those who increasingly see governance through a post-functional lens of competitive politicization in both domestic and cross-border policy-making.
While this volume’s contributions describe significant governance challenges Canada must overcome, each author identifies opportunities to do so by identifying forward-looking paths and options for effective cooperation. None will be achieved easily, but as Canada’s borders (both physically and figuratively) are subjected to a state of continuing transformation, forward-looking strategies for stable, predictable forms of governance take on added importance. In the midst of continuous transformation and challenges to the status quo, the political response to the resulting anxieties can sometimes be a lurch toward radical change. The contributors to this volume have, instead, contextualized their practical recommendations against the contemporary political realities of Canada’s fluid borders.
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