Thank you very much, Mr. Chairman, and members of the committee.

It is an honour to be back here in Ottawa to have an opportunity to talk to you about this important topic, and quite frankly, most of all to be back to see so many friends around the room.

As you say, I have been fortunate to have had the opportunity to address the relationship among the three North American countries from a number of perspectives. I was the ambassador here for four great years of my life. I have attended the North American leaders' summits. I am now the vice-chairman of BMO, the Bank of Montreal, with operations that span the border in a very significant way.

One of the things I should make clear from the outset is that it would be pretentious of me to try to tell Canadians how to negotiate with my country. All I can do is pass along my own perspective, based on my experience in areas where I believe all three of our countries should focus in order to enhance the well-being and prosperity of our people, which I know is a goal we all share.

To that end, I want to focus on five issues. First, while we have done a good job—not a perfect job but a good job—of reducing tariff barriers to trade between our two countries, we have to do a better job, indeed probably a much better job, of reducing some of the non-tariff trade barriers that still exist. We've taken some significant strides over the last few years, particularly with the beyond the border initiative between the United States and Canada, but it is not time to declare victory and rest on our laurels.

The best way to reduce delays and confusion at the border—and I think all of us on the panel so far are in violent agreement on this one—is to enhance the sharing of information before people and goods get to the border. First, this facilitates the swift movement of pre-cleared goods and people. As well, the time that border guards don't have to spend checking honest, good, law-abiding people and safe goods is time they can spend looking for bad guys and dangerous products.

In my mind, the best example—and again, this was alluded to earlier— is the NEXUS program. It has now taken the next step, in which both American and Canadian citizens who are members of NEXUS can participate in the pre-check program, so that when we go through airport screening we don't have to take off our shoes, and we don't have to take liquids out of our bags every time we want to get on a plane. That is real progress.

I will tell you a true story.

Recently I was going through one of the pre-check lines and the woman in front of me said to the CBSA guard, “You know, this is the best program in the history of government.” I think I may have to agree with her on that one, so I want to congratulate all of you.

The second set of non-tariff trade barriers are the regulatory differences between our two countries. The same applies with respect to Mexico. It's not just the differences, but differences that really don't make a whole lot of sense, the so-called tyranny of small differences.

When I was in Canada I talked all the time about Cheerios. I see Laura Dawson, the next speaker, smiling. I think she was the one who put this together with me. Because I am pathetic, I eat the same thing for breakfast every single morning. I eat Cheerios. When I'm in the United States I eat the Cheerios that are fortified in accordance with the requirements of the United States government, and when I'm in Canada I eat Cheerios that are fortified in accordance with a different recipe, as required by the Canadian government. I'm here, Mr. Chairman, to assure every member of this committee that I feel neither healthier nor cheerier in one country or another.

I remember the first time I talked about this, some guy in the back of the room raised his hand and said, “Well, which one should we adopt?” and I said, “It doesn't matter to me and it doesn't matter to you. Just make them the same." There are so many of these small differences that really don't enhance our health and safety in any measurable way. They're just different. Seat belts are different between our two countries. Deodorant is different between our two countries. All that these differences do is make products more expensive, reduce consumer choice, and lower product quality, and there is no commensurate public benefit.

The third area that I think we need to focus on in order to enhance the economic well-being of our citizens is continued work on regional trade agreements. Again, I think all of us on this panel are in agreement that NAFTA has been beneficial to Canada, it has been beneficial to Mexico, and it has been beneficial to the United States. But NAFTA was the original trade agreement, trade agreement 1.0. I think Ambassador Davila referred to TPP as trade agreement 2.0. I would probably call it trade agreement 4.0. We've learned a lot as we've gone on over the last few years, 20 years, and it is going to fix and address some of the deficiencies of NAFTA. It is going to expand the benefits of free trade to a number of our Pacific partners.

At the same time, Canada and the United States need to continue to work on trade agreements with the European Union. I think as a strategic matter, once the three NAFTA countries have trade agreements with the Pacific countries and have trade agreements with the European Union, it puts us, these North American countries, in an extremely strong position as the bridge between the other two great trading blocks in the world. This has the potential to create millions of jobs in your country and in mine.

The fourth thing that I think we have to think about is doing a better job of including Mexico in trilateral initiatives. This is particularly true, and the ambassador referred to this, in the areas of energy and in regulatory cooperation, where I think we can make a lot of progress.

Finally, we have to encourage regional cooperation between our countries. Again, as I travelled around Canada, I would constantly hear about the relationships north-south, indeed sometimes at the expense of the east-west relationships in Canada. The Pacific northwest economic region, PNWER, has for a long time worked to coordinate the efforts of the western provinces and the western states of the United States. The Atlantic premiers and the New England governors have long worked together to expand the economic benefits in their regions.

Just this past April I had the opportunity to participate in the Great Lakes Economic Forum that was held in my hometown of Chicago by the Council of the Great Lakes Region. That's a region that had $5.8 trillion of economic activity last year. It accounted for 30% of the combined U.S. and Canadian GDP and 31% of our jobs. If just that region, the centre of the two countries, was itself a country, it would rank as the third-largest economy in the world, ahead of Japan, ahead of Germany, France, Brazil, and the U.K.

The provincial and state leaders know and understand the importance of this. They are trying to continue the momentum of this regional cooperation. One of the things that I would encourage all of you to do is to work with them to facilitate that. In two weeks, I'm going to join the Great Lakes and St. Lawrence governors and premiers in Quebec City. In the coming months, representatives from these regions are going to travel all around the world and they're going to sell the merits of trade, not just in their province, not just in their state, but in these economically strong regions, which I think benefits all of us.

Mr. Chairman, Canada, the United States, and Mexico have a full plate of issues to work on to enhance the well-being of our citizens. I again congratulate you for your work in this area and I look forward to your questions.

Thank you very much.