Towards a More Competitive North America

March 17, 2006

The following article was adapted from speeches delivered in March 2006 at the Canadian Chamber of Commerce in Mexico City and the Center for Globalization and Policy Research at the University of California in Los Angeles.  An edited version appeared in the National Post, March 17, 2006.

By Thomas d’Aquino
Chief Executive and President
Canadian Council of Chief Executives
March 17, 2006

North America faces a powerful challenge from major emerging economies, notably China and India, and must respond with much improved public policy frameworks and with more innovative private sector leadership.

Protectionism will not hold back the tide of change and will serve only to delay critical reforms.  The need for reform is greatest in Mexico, where growth levels are far from adequate to spur badly needed investment and job creation.  Education and skills development must move to the forefront of Mexico’s agenda. In addition, Mexico’s tax system needs a fundamental overhaul if critical social and economic infrastructure investments are to be realized. The energy sector must be opened up, and public safety must be assured.

The North American Free Trade Agreement, which over the past 13 years has delivered so many benefits to all three participating countries, requires reaffirmation.  It needs to be strengthened and deepened.  Political and business leaders alike have a responsibility to defend and to advance this underappreciated economic charter for North America. 

And what about the North American Security and Prosperity Partnership (SPP)?  In announcing its formation a year ago in Texas, the leaders of Canada, the United States and Mexico appeared to be signaling an important new phase in promoting continental cooperation on the security and economic fronts.  But after a promising start, the SPP as well seems to be faltering.

The planned meeting of Prime Minister Stephen Harper, President George W. Bush and President Vicente Fox in Cancun at the end of this month offers an opportunity to breathe new life into the SPP.

One area in particular deserves the special focus of the leaders: the competitiveness of North America.  The continent’s leading edge in innovation can only be sustained with stepped-up efforts in both basic and specialized education.  More resources for research should be freed up and cooperation between innovators and commercializers must be significantly deepened.

In addition, political leaders in all three countries must embrace both a vision and a strategy for helping to pilot the three major partners of North America through the coming decades of transformation.  A top priority is to ensure that public policy is friendly to a culture of innovation.  Among other initiatives, this will require the removal of impediments that discourage or strangle entrepreneurship.

Business leadership will be key to successfully meeting the challenge. Here, Canada and the United States in particular must accelerate cooperation.  The economies of our two countries are highly integrated and interdependent in every important sector.  Our values are similar and our respect for the rule of law is second to none.  We are committed to the security of the continent, and our armed forces and intelligence communities are working in concert.

The rockbed of the Canada-United States relationship is strong but at the top level it is in need of repair.  In recent years, Canadian prime ministers and some senior decision-makers found it politically expedient to engage in anti-Americanism and to turn a blind eye towards some in positions of authority who relished in delivering insults, some aimed at the President himself. 

While I am proud to wear my Canadian nationality on my sleeve and do not blush at practicing overt patriotism, I do not believe that one should deal with a great friend and ally with anything other than profound respect.  As two strong countries, we can and should work closely together.  In some areas we will go our separate ways and disagree, but this can be done without being disagreeable.

Canada’s new Prime Minister has committed himself to repairing the relationship and I have every confidence he means what he says.  In addition, my country’s new ambassador to Washington, Michael Wilson, is a man of great experience and acumen and will represent Canada’s interests in the United States with consummate skill.  The road ahead in my view is brighter and more reassuring.

The Canadian Council of Chief Executives is playing a leading role in promoting stronger North American cooperation and competitiveness.  In 2003, we launched the North American Security and Prosperity Initiative, and since then our organization has continued to be at the forefront in developing and advocating ideas for more effective integration in economic and security matters.  Given our ongoing commitment, it is no surprise that we continue to be active proponents of the North American Security and Prosperity Partnership under the aegis of the three governments.

In the area of competitiveness more specifically, the Council’s recent publication of From Bronze to Gold: A Blueprint for Canadian Leadership in a Transforming World contains bold and ambitious proposals aimed at ensuring that Canada remains in the forefront of global competitiveness.

As the leaders of Canada, Mexico and the United States prepare to launch new efforts at cooperation in improving the competitiveness of North America, my Council will continue to provide a private sector leadership role in Canada and in cooperation with our American and Mexican counterparts.