Discussing Keystone XL and trade labeling with the neighbors

Marcy Grossman, the consul general of Canada,  spoke with Utah Valley University students, faculty and members of the community on August 5 to discuss Canada’s economy, investments in the United States – particularly in Utah – and the relationship between the US and Canada.

Canada is Utah’s third biggest export partner. Barrick Gold Corporation and Potash Ridge Corporation are both Canadian companies with offices in Salt Lake City.   Toronto-based Redline Communications has partnered with UTA to offer free wifi on Frontrunner. The three biggest trade sectors are electronics, oil/gas and agriculture.

There have been trade obstacles in the agriculture industry; country-of-origin labeling (COOL) requires that all covered products – specifically beef and pork – be labeled with information designating where they came from. Canada and Mexico filed a complaint with the law, saying that it goes against the WTO (World Trade Organization) agreement. A panel for the WTO ruled in Canada and Mexico’s favor, and said imported produce could not be treated less favorably and that the verification requirement would put a burden on imported livestock.

Canada has brought complaints against the labeling three times, and expects a final ruling in the coming months. Meanwhile, a federal court has ruled in favor of COOL in a lawsuit led by the American Meat Institute. AMI said the new law is costly and provides no benefit to the consumer. The ruling said that consumers have an interest in where their meat comes from, and there are health concerns in the case of a foodborne illness outbreak.

“When you have this integrated market, it’s important to keep border flowing,” said Grossman. “If the US is still discriminating against Canadian beef, then the Canadian government is prepared to retaliate, which means that people in other industries will have to pay for the position of a few small vocal voices.” Grossman also pointed to “Buy America,” a campaign to encourage Americans to buy local, as a trade obstructer.

Nationally, Canada is the leading provider of all forms of energy into the US. There are 82 cross-border pipelines between the US and Canada. The Keystone XL project would be the 83^rd. TransCanada proposed the project five years ago and has been trudging through political regulatory review since.

If the State Department approves the project, it will run from the oil sands in Alberta to the Gulf Coast. Some environmentalists and landowners have opposed the pipeline. Ecological criticisms consist of the greenhouse gas (GHG) emissions from the oil sands and possible leaks into the nation’s groundwater. There is also a concern among some that the pipeline will discourage moving away from fossil fuels. The State Department did environmental assessments and declared that the pipeline would have no significant environmental impacts, considering that if the pipeline isn’t built, it will be shipped by rail.

“It will generate jobs on both sides of the border – there’s some debate on how many jobs that will be, but we know that trade directly or indirectly creates job. It will actually produce less GHG emissions by moving the oil by pipeline than rail, because pipelines emit 42% less emissions than rail,” said Grossman.

The State Department updated their most recent environmental study to say that since the oil sands will be developed regardless, the environmental impact is neutral. They also said that rail traffic would increase without the pipeline, which would in turn increase the potential for accidents.

A decision on the pipeline is expected this fall, but could be pushed until after the midterm elections. The State Department has given other agencies time to review the proposal, and is parsing through 2.5 million public comments.

The biggest disagreements between the US and Canada are the Keystone XL pipeline and COOL. Other than that, Grossman says, the two countries are well united, geopolitically.

That said, Grossman rejects the notion that Canada is the 51^st state. The Canadian government has done focus testing to help their business brand in the US and has seen a disconnect.

“They don’t have a bad thought about us. They just don’t think about us,” said Grossman.

This lecture, free to students and the public, is the most recent in the series hosted by UVU’s Office of International Affairs and Diplomacy.