28th Annual Conference of the
New England Governors and
the Eastern Canadian Premiers

An Historic Relationship: Economic Partners - Enduring Friends

28th Annual Conference of the New England Governors
and the Eastern Canadian Premiers
Groton, CT  - September 7 - 9, 2003

2002 - 2003 REPORT

BY THE STANDING COMMITTEE ON
TRADE AND GLOBALIZATION

In July 2000, the New England Governors and Eastern Canadian Premiers searched for a mechanism for their states and provinces to work together to increase international trade for their businesses. Knowing that as a group, they could pool their respective resources to assist the business community, the Standing Committee on Trade and Globalization (the Committee) was thus established by the Conference (Resolution 25-6). Its mandate is to examine, address, and make recommendations regarding issues, opportunities, and constraints to international trade and globalization in the New England and Eastern Canadian regions (see Appendix 1).

Issues and concerns are brought to the table for discussion by designated officials and examined to see how the export/import efforts of the business community are impacted by global and regional factors and what possible solutions can be developed. The Committee normally meets twice per year (once in New England and once in Eastern Canada).

Current topics being addressed by the Committee are discussed below.

1. Trade Promotion

The primary goal is to expand trade. Committee members who work for the state’s and province’s international trade offices continue to evaluate possibilities for joint activities to increase trade between the eleven jurisdictions.

One joint activity that has been identified is trade mission development. For example, one or more New England states could conduct a trade mission to one or more of the provinces. Such exchanges increase international trade between New England and Eastern Canada.

Another initiative is to link the states’ and provinces’ international trade and economic development websites to facilitate businesses who are interested in conducting business in another jurisdiction. Such links include target market information, events, seminars & training classes and contact information for each jurisdiction’s website. The international trade section of the website of the Province of Newfoundland and Labrador is an example of how trade can be fostered between a Province and New England. The website has an entire section devoted to information on New England as an export market, including market reports on each of the states, contact information for each state and more.

In addition to website linkage, each jurisdiction is to add their NE/EC counterparts to their regular mailing list of events and activities to further disseminate information on activities that may be useful to their respective business communities.

The Committee continues to target other initiatives and programs to expand trade between New England and Eastern Canada.

2. Dispute Avoidance

To assist the business community to avoid trade disputes between New England and Eastern Canadian, the Committee has developed a mechanism for direct communication between state and provincial trade representatives to exchange information pertaining to a potential trade dispute. A list of key contacts in each state and province has been assembled developed and forwarded to each member of the Committee. In 2002, this mechanism was successfully tested in a case involving a New Hampshire company and the Government of Quebec.

3. Border Security

New England imports $18 billion a year from Canada, four times more than they export to Canada. Due to lower costs of ocean shipping through Montreal and Halifax, and especially the geographic proximity of the Port of Halifax to New England ports, many New England exporters and importers utilize Canadian seaports instead of US seaports, thus increasing the rail and truck traffic across the border above and beyond trade strictly with Canada.

The financial and economic impact to the business community and related jurisdictions of long delays of commercial and passenger vehicles at border crossings extends well beyond the business communities of the states and provinces directly bordering the US or Canada. 80% of trade from Eastern Canada to the United States is destined to New England, and 80% of trade from New England to Canada is destined for the Eastern Provinces. Delays resulting from security concerns at the border crossings have cost those businesses, and ultimately all the jurisdictions, more money. In addition, most of the remaining truck traffic crossing the border actually passes through these states and provinces to businesses in non-border jurisdictions. Both federal governments are working on addressing these issues (see Appendix 3).

Many communities along the New England/Eastern Canada border are truly international with each country providing the other with goods, workers, services, retail shopping and healthcare facilities. The significant trade co-dependency (e.g. fish inputs, Boston as a major distribution center) and the integration in a number of sectors, including forestry and agriculture needs to be recognized in both national capitals is that there exists significant trade co-dependency (e.g. fish inputs, Boston as a major distribution center) and there is integration in a number of sectors, such as forestry and agriculture. It is crucial, therefore, that our borders allow for day to day life to continue while, at the same time, fully addressing our heightened security concerns. Thus, it is important for Governors and Premiers to continue their efforts in ensuring that their border security/open trade concerns are addressed.

4. Transportation

Transportation infrastructure plays a vital part in the business community’s efforts in trade. Between New England and Eastern Canada, highway and rail infrastructure is, by all accounts, the most important, followed by seaport and airport infrastructure. Because of the importance transportation infrastructure plays in the economic arena, a Transportation Working Group (sub-committee) of the Trade & Globalization Committee has been established to focus specifically on the issue of transportation and it’s affects on trade between New England and Eastern Canada.

The highway systems throughout New England and Eastern Canada have been the subject of much review by two main transportation groups. The two primary transportation border groups focused specifically on cross-border transportation are the Eastern Border Transportation Coalition (EBTC), and the Transportation Border Working Group (TBWG). Members of the Trade and Globalization Committee’s Transportation Working Group maintain close contact with both (see Appendix 2).

Topics being addressed by the Transportation Working Group include:

A. Intelligent Transportation Systems (ITS)

Vermont, New Hampshire and Maine Departments of Transportation have been engaged in a rural Advanced Traveler Information ITS project since 1997, called TRIO. This multi-state system will provide information services to both commercial vehicle operators and private passenger travelers throughout the three states and is also being designed to allow access for travelers entering the states from north of the US/Canada border.

There is significant interest in expanding this system, and other ITS technologies with partners in Canada, as well as with the three southern New England states. A crucial factor in this will be the development of Canada’s National Architecture Standards.

A recommendation from the NEG/ECP to national and regional partners will help to insure the compatibility of the US and Canadian technologies and may provide the basis for enhanced cooperation.

B. I-95 Corridor Coalition

The Committee is now an affiliate member of the I-95 Corridor Coalition as mandated in Resolution 27-1. Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut are full members. The province of New Brunswick is an associate member and has been granted ex-officio status on the Steering Committee and Executive Board. Other jurisdictions have not yet submitted applications for membership.

Benefits of membership include opportunities to enhance the Canada-US Atlantic trade corridors through networking and learning from other’s experience; shared research and development opportunities and coordination of resources.

C. NASTO Study Follow-up

The Committee is working with Cambridge Systematics to develop strategies for building upon the Northeast Freight Service and Investment Study which was presented to the governors and premiers at last year’s conference. Among the strategies being considered are:

• Documenting the type, extent, and limitations of the existing freight data which is currently available to the states and provinces in the region, and developing strategies to fill the data gaps. Completion of this project will allow states and provinces to identify existing freight data sets in the region and to work collaboratively to develop strategies designed to improve the flow of freight within the region.

 

• Actively participating in the Northeast Rail Operations Study, designed to develop a regional public/private rail improvement program to reduce or eliminate key physical, operational, and information system choke points in the region, thereby increasing freight-rail and passenger-rail service capacity, and relieving congestion on the rail, highway, and air systems.

D. Truck Weight Harmonization

Due to each state and province’s individual regulations, truck weights permitted on their highway systems vary. This is causing difficulty with the trucking systems as they cross the border. It has negatively impacted the amount of freight the industry is able to transport, thus raising costs for the business community as a whole. Efforts are now underway to address this issue.

E. Air Service

Transportation policy in Canada, including air transportation policy (unlike that in the United States), has historically been based on an east-west flow of goods and people. Since the passage of the US-Canada Free Trade Agreement, a shift has occurred, with north-south patterns receiving more attention.

Air service between Eastern Canada and New England, however, remains limited and is an obstacle in attempts to strengthen trade, tourism and business development.

The airline industry, world-wide, continues to face a number of challenges. As a result, air carriers have experienced severe financial difficulties and have been forced to revisit their business models and governments are re-examining policy and regulatory instruments being applied to the airline industry.

Over the next twelve months, the Committee will maintain oversight of these issues, and will report to the governors and premiers again next year.

Proposed Activities for 2003-04

During 2003-04, the Committee proposes to continue its work on facilitation and expansion of trade within the region. Specifically the Committee intends to:

• Implement a trade development action plan focused on the needs of the business communities in all jurisdictions and designate trade promotion officials from each jurisdiction as alternate members of the committee to supplement trade policy.
  
• Further avoid or reduce the incidence and cost of trade disputes between New England and Eastern Canadian jurisdictions by refining direct communications protocols for quick exchange of information between the relevant international trade officials and businesses involved/affected.
  
• Maximize collaboration on border security and efficiency issues through participation on relevant committees and lobbying federal governments to implement and/ or expand custom clearance procedures, including resolution of issues in the NEXUS and FAST programs;
  
• Continue its work on transportation infrastructure and regulatory matters incorporating recommendations from various regional bodies;
  
• Continue to focus on air service issues with a view towards achieving a regional solution to the complex problems in this industry; and
  
• Examine and report back to the Conference on, the feasibility of establishing a reciprocal cross-border certification process for professional engineers.

 APPENDIX 1

Background

The Standing Committee on Trade and Globalization was established by the Conference of New England Governors and Eastern Canadian Premiers in July 2000 (Resolution 25-6) to examine and make recommendations regarding issues, opportunities, and constraints related to trade and globalization, relative to the New England and Eastern Canadian regions.

In Connecticut in August 2001, Resolution 26-5 was adopted mandating the Committee to:

• Work with the business community to meet the mandate and goals of the Conference’s future activities;
  
•  Participate in a Trade & Transportation Infrastructure Study for the purpose of identifying areas where joint effort may be beneficial; 
  
• Share information related to trade development, energy, and trade policy; and
  
•  Consider the establishment of a working group of key knowledge economy innovators to facilitate information sharing and the creation of potential linkages that will support further development of the regions’ knowledge industry.

Last year, the Governors and Premiers, at their meeting in Québec City, adopted Resolution 27-1 that instructed the Committee to:

• Continue its efforts to facilitate and expand trade within the Northeast;
  
• Develop a framework for establishing direct communication among state and provincial trade representatives for the purpose of exchanging information and avoiding potential trade disputes;
  
• Seek financial support from both federal governments to make international trade corridors, including border crossings, more fluid and efficient while maintaining security and safety;
  
• Ensure that Eastern Canadian-New England border issues are considered during the development and implementation of new customs clearing procedures, including the NEXUS program for low risk individuals and FAST program for commercial traffic;
  
• Secure full or associate membership in the I-95 Corridor Coalition with the purpose of developing Intelligent Transportation Systems (IST) technologies, improving inter-jurisdictional coordination and promoting other significant international trade corridors;
  
• Build on the NASTO Freight Service and Investment Study Review policies and regulations surrounding commercial vehicles, including trucks, and report to the 2003 Conference on those areas where there exists the potential for cooperation among the various jurisdictions; and
  
• Enter into discussions with both federal governments and appropriate organizations with the objective of improving air service within the region and particularly across the border by expanding the use of such concepts as pre-clearance of air travelers.

APPENDIX 2

Eastern Border Transportation Coalition (EBTC)

The EBTC has been in existence since 1993 and its voting members are state/provincial Departments of Transportation and several Metropolitan Planning Organizations from Michigan/Ontario eastward, with the exception of New Hampshire DOT. EBTC also has well-established relationships with US General Services Administration, Customs, and the Immigration and Naturalization Service and their Canadian counterparts. They have produced several studies and reports which deal with cross-border transportation and have hosted annual forums on various border issues, legislative impacts, various state/provincial projects and have provided invaluable networking opportunities. The focus of the EBTC is on surface transportation, highway and rail, with commercial transport as its top priority.

The EBTC recently completed a study titled “Truck Freight Crossing the Canada-U.S. Border”. This study is an assessment of the Canada-U.S. component of Canada’s National Roadside Study of Trucks traveling throughout Canada. The study provides a more expansive and significant view of trade and traffic between the U.S. and Canada than previously available. It contains some excellent data on current and projected commercial traffic and routings, commodities and forecasts, albeit these results show large future burdens on the highway infrastructure. Completion of this study is an example of multi-jurisdictional cooperation and has enhanced the understanding of cross-border truck movements within the New England/Eastern Canada region. A follow-on study to add cross-border rail freight data is in development with FHWA funding already secured.

Transportation Border Working Group (TBWG)

The TBWG has been coordinated by the US Federal Highway Administration and Transport Canada since October 13, 2000. Its intent is to bring together a full complement of state and provincial Departments of Transportation, representing the entire northern US border, along with US and Canadian federal agencies that deal with cross-border transportation.

While the initial focus of the TBWG was to aid in streamlining and expediting cross-border clearance and identifying infrastructure needs, the impact of September 11th added a degree of urgency and complication to some of the group’s early goals. TBWG’s primary areas of interest include: roadways, rail, and marine ports.

One issue that complicates cross-border transportation cooperative efforts is a US federal funding constraint which does not allow project cost-sharing and joint funding of border improvement and facilities with Canadian partners. Currently US transportation agencies are not allowed to pool funds with other federal agencies such as INS, Customs, or GSA, nor are they allowed to spend money in Canada.

APPENDIX 3

Border Security

Current activity to alleviate such disruptions and delays include:

Plans to construct new, or upgrade existing, border station facilities at all of US/Canada ports of entry (on both sides of the border). In addition, the US Department of Homeland Security’s border protection and enforcement divisions are already deploying additional security and screening procedures and equipment, possibly requiring additional roadway improvements at or near these ports of entry.

New FAST portals (for commercial traffic) will be developed under federal funding from both nations by the end of 2003 at Rock Island-Stanstead, Quebec and Derby Line, Vermont; at St. Armand-de-Phillipsburg, Quebec and Highgate Springs, Vermont; and a new FAST driver enrollment center will be opened at the Woodstock, New Brunswick – Houlton, Maine border crossing.

The Vermont Agency of Transportation and the Quebec Ministry of Transport are now working directly with the US General Services Administration and the border agencies from both countries to review plans for the new port facilities to assure strong coordination with regard to infrastructure improvements and to facilitate traffic flow between the two countries. The New Brunswick Department of Transportation and the Maine Department of Transportation are conducting a similar project in conjunction with the I-95 Corridor Coalition and other stakeholders to assess, coordinate and incorporate ITS into the site development process for the new proposed St. Stephens / Calais – Woodstock / Houlton border crossing project. New York and Quebec are also conducting similar initiatives.

The governments of New Brunswick and Maine are developing designs to include FAST and NEXUS lanes in the forthcoming redevelopment of the St. Stephen, New Brunswick / Calais, Maine – Woodstock, New Brunswick / Houlton, Maine border crossings project. Funds for this project are being sought from both the Canadian and United States governments.

The Atlantic provinces recently completed a strategic plan for the development of Intelligent Transportation Systems including Road Weather Information Systems and Advanced Traveler Warning and Information Systems.

The I-95 Corridor Coalition is a regional partnership of major public and private transportation agencies, toll authorities and industry associations serving the eastern United States from Maine to Florida (Georgia is the only state that is not a member.) It was established in 1993 to enhance mobility, safety and efficiency across all modes and transportation facilities that serve the region. The Coalition receives federal support for its ongoing ITS activities to improve freight and passenger movements throughout the region. The Coalition brings together a vast amount of ITS experience to advance the use of technology along the Atlantic trade corridor.

Maine DOT, along with the New York State DOT has sponsored this project which is a follow on study to the Mid-Atlantic Rail Operations Study (MAROPS) which examined the rail network in the mid-Atlantic states (New Jersey, Pennsylvania, Delaware, Maryland, and Virginia) and developed a consensus program of 71 rail infrastructure and information-technology improvements which will be implemented over 20 years.

The current maximum truck weight permitted on most arterial routes in Atlantic Canada and Quebec is 137,787 lbs (62,500kg) for twin semi-trailers. In Maine, and other New England states, the maximum allowable rate is 80,000 lbs (36,288kg), except on some turnpikes and state roads, where weights up to 100,000 lbs (45360 kg) are permitted. Twin semi-trailers are generally not operated in New England. The “Commercial Truck Highway Safety Demonstration Program Act of 2003”, currently under consideration in the United States Senate and House of Representatives would permit a trial program which would raise the allowable weight for 6-axle tractor semi-trailers operating on Maine interstate highways to 100,000 lbs (45,360kg) which is currently allowed on Maine’s state highways. Such an increase would remain somewhat lower than the 104,717 lbs (47,500kg) which are allowed for 6-axle tractor semi-trailers operating in Atlantic Canada and Quebec. Five-axle tractor semi-trailers operating on state highways in Maine can obtain special commodity permits which allow weights of up to 88,000 lbs (39,917kg), somewhat lower than the 91,490 lbs (41,535 kg) allowed in Atlantic Canada and Quebec for a common 5-axle tractor semi-trailer. Such an effort is seen as a first step in achieving truck weight harmonization with Maine, and the Eastern seaboard states for the trade corridor running from Newfoundland and Labrador, through Nova Scotia, Prince Edward Island, and New Brunswick, through the New England states on to Florida. New Brunswick and Maine are pursuing discussions with the other New England states.

Other areas of possible harmonization between the New England states and Eastern Canadian provinces include an Atlantic Provinces initiative entitled: “Atlantic Regional Special Permits-Proposed Conditions for Movement of Over-dimensional Indivisible Vehicles and Loads and Training and Training and Certification Programs for Pilot Vehicle Drivers in Atlantic Canada.”

Present direct trans-border service is composed of the following routes:

       

The airline industry, world-wide, continues to face a number of challenges resulting from: 

• the decline in the high technology sector with a significant effect on traditional high-yield business travel;
• a general economic slowdown the terrorist attacks of September 11, 2001; 
• rising fuel, insurance and security costs the war in Iraq; and 
• the outbreak of Severe Acute Respiratory Syndrome (SARS).

This may be an appropriate time to focus attention on how well our region is being served with respect to air service and to advance proposals that would greatly facilitate strengthening economic and business links. For example, action has been taken by New Brunswick and Quebec to enhance air service. In New Brunswick, a travel bank established by the Fredericton Chamber of Commerce and supported by the business community as well as government in the region, has resulted in new, twice-daily non-stop service by Delta Airlines between Fredericton and Boston, and the government of Quebec has signed an agreement with Air Canada to maintain service to smaller communities in that province through a guaranteed volume of business.