From August
10-12, 2012, members of the Canadian Section of the Canada-United States
Inter-Parliamentary Group (IPG) attended the annual meeting of the Southern
Governors’ Association (SGA) in Rio Grande, Puerto Rico. The Canadian Section
was represented by Senators Percy Downe and Jean-Guy Dagenais. The delegation
was accompanied by Ms. June Dewetering, the Canadian Section’s Senior Advisor.
THE EVENT
Founded in
1934, the SGA is the oldest of the regional governors’ associations and has a
long history of promoting the common interests of the Governors of the 16 U.S.
southern states as well as the U.S. Virgin Islands and Puerto Rico (see the
Appendix). The SGA provides a bipartisan forum in which to help shape and implement
national policy, as well as to solve regional problems, improve the quality of
life of residents of the U.S. South, and secure an economically vibrant and
prosperous American South.
Each year, the
SGA holds an annual meeting. The 2012 annual meeting was focused on the theme
of “Growth Beyond Our Borders – Jobs, Investment and Trade in the American
South.”
DELEGATION
OBJECTIVES FOR THE EVENT
Canada and the
16 SGA states have a relationship that is mutually beneficial. According to
recent figures, more than 3 million jobs in those states rely on trade with
Canada, which was valued at just under US$106 billion in one year: almost US$55
billion was exported from the 16 states to Canada, while they imported just
over $51 billion from Canada. Residents of Canada and these 16 states are also
frequent visitors. In a recent 12-month period, Canadians made more than 6.7
million visits to the 16 SGA states and spent more than US$4.9 billion, while
residents of those states made more than 1.9 million visits to Canada and spent
almost $1.4 billion. In terms of the Canada-Puerto Rico relationship, bilateral
trade was recently valued at more than $2.2 billion in a 12-month period, with
Puerto Rico exporting $1.7 billion to Canada and the country importing $549
million from Canada.
The
Canada-United States IPG aims to find points of convergence in respective
national policies, to initiate dialogue on points of divergence, to encourage
the exchange of information, and to promote better understanding among
legislators on shared issues of concern. In addition to regular meetings with
their federal counterparts, members of the Canadian Section of the IPG attend
national and regional meetings of governors. At these events, Canadian
delegates take the opportunity to engage in the conversations that will help
achieve the Canadian Section’s objectives, and to communicate the nature and
scope of the bilateral relationship.
ACTIVITIES
DURING THE EVENT
During the
2012 annual meeting, the SGA held the following plenary sessions and roundtable
discussions:
·Strengthening the Region’s Ties to Latin America
– A Market Overview
·Strengthening the Region’s Ties to Latin America
– Sustaining a Logistical Advantage
·Meeting the Infrastructure Challenge through
Innovative Financing
·Supporting the Reshoring of Advanced
Manufacturing
·Politics Over Breakfast
·Energy in the American South – Trends,
Predictions and Policy Considerations.
This report
summarizes the presentations that were made and discussions that occurred at
the 2012 annual meeting.
SUMMARY OF
PRESENTATIONS
STRENGTHENING
THE REGION’S TIES TO LATIN AMERICA – SUSTAINING A LOGISTICAL ADVANTAGE
Alberto
Alemán Zubieta, Panama Canal Authority
·Expansion of the Panama Canal, which will
benefit almost all U.S. states, will have direct and ripple effects, and there
will be more countries to which the region will export and from which it will
receive imports.
·The locks on the Atlantic and Pacific sides are
the most complicated part of the Panama Canal project.
·The Panama Canal is the most central port in the
entire world, with easy access to both the Atlantic and Pacific oceans.
Myron Gray,
UPS
·Trade plays an important role in economic growth
and job creation.
·A pro-growth environment for businesses is
important.
·Growth-oriented businesses need access to
customers around the world.
·Approximately 1% of U.S. businesses export, and
most that do so export to a single country; there is a need to increase the
number of U.S. companies that export.
·Businesses that export grow more quickly and are
more resilient.
·For the U.S. South, Canada and Latin America are
great markets; there is no need to focus either mostly or exclusively on Asia.
·The United States’ free trade agreements with
Panama and Colombia hold particular promise for the U.S. South because of
geography.
·Governmental economic development agencies
should be encouraged to work with businesses.
·Investments in public policy initiatives that
promote growth, such as in transportation infrastructure and education, should
occur.
·Transportation congestion is both an economic
development issue and a quality-of-life issue.
·Businesses need the right workers with the right
skills in the right quantities.
·States should ensure that they are attractive to
businesses that export.
Jerry
Bridges, American Association of Port Authorities
·In order to sustain its growth, the U.S. South
must modernize its transportation infrastructure, including rail, ports, roads
and airports.
·States can provide infrastructure funds for port
construction and enhancements, including intermodal connections.
·Port modernization and maintenance are needed in
order to support the U.S. South, including to meet trade goals.
·The U.S. South needs to act and “speak” as a
region.
·Notwithstanding the competitive world, all ports
can work together.
MEETING THE
INFRASTRUCTURE CHALLENGE THROUGH INNOVATIVE FINANCING
David
Chavern, U.S. Chamber of Commerce
·States are the laboratories of reform, and can
affect national debates on such issues as infrastructure.
·The “Let’s Rebuild America” initiative raised
infrastructure to the Presidential level.
·Infrastructure affects business and gross
domestic product (GDP) growth.
·Sustainable infrastructure funding is required,
and infrastructure needs to be maintained, modernized and expanded.
·State and federal deficits, and federal debt,
are challenges, and challenges need to be met with solutions.
·Robust private-sector investment is needed, and
private-public partnerships (PPPs) can be used to meet many transportation
needs.
·The U.S. Chamber of Commerce thinks that PPPs
should be the norm, rather than the exception; that said, PPPs are not a silver
bullet, and they will not work for everything everywhere.
·Some projects require pay-as-you-go funding.
·Inevitably, change is difficult.
Robbi
Jones, Kipling Jones & Co.
·The U.S. Southeast is very pro-business.
·PPPs are becoming more attractive to businesses,
foundations and endowment funds; PPP collaborations are also occurring with
pension funds, some of which are participating in infrastructure projects in
their state, as well as in other states.
·Some states have legislation that makes it
easier for the private sector to invest in the public sector.
·The public sector should fully grasp the goals
of its private-sector partner; it is easier to negotiate if the goals of the
entity with which negotiations are occurring are known.
·The private sector should:
Øensure that the public entity understands the
risk that it will face
Øensure that it and the public entity have a
shared goal
Øunderstand the “players”
Øunderstand the risks
Øhave clear and consistent leadership
Øensure adequate communication.
·There are risks with PPPs, including an uneven
transfer of risk and an inadequate transfer of information about that risk.
David
Álvarez-Castañeda, Puerto Rico Public-Private Partnerships Authority
·In 2009, Puerto Rico developed a framework
regarding PPPs, and this framework is specified in legislation; it includes the
establishment of a PPP authority and a methodology for identifying projects.
·In Puerto Rico, PPP projects funded to date
include schools, toll roads and airports.
·Governments require a “toolbox” in order to fund
infrastructure, and PPPs are a tool.
·PPPs help to support a better future.
SUPPORTING
THE RESHORING OF ADVANCED MANUFACTURING
Harold
Sirkin, Boston Consulting Group
·The “death” of the American manufacturing sector
has been greatly exaggerated; the United States is at the beginning of a new
manufacturing renaissance.
·The U.S. economy is structured in a manner that
permits it to respond quickly to challenges and threats, and the United States
is structured to compete.
·Americans respond, adapt and thrive.
·The United States is among the most productive
nations in the world; it is 33% more productive than Japan and 25% more
productive than Germany.
·China does extremely well at economic
development, in part because of low wages and its development of clusters that
encompass the entire supply chain.
·China’s productivity gains are being “swamped”
by the increasing relative value of the yuan.
·U.S. businesses outsourced to China because of
relatively lower costs, especially for labour; however, costs are rising in
China, and a number of North American businesses are reconsidering their
production locations.
·Some European countries are using the United
States as a re-export hub; North America is a source of supply for many parts
of the world.
·“Apparel, footwear and accessories” is the only
category in which the United States does not produce 40% of what it consumes.
·Americans need jobs now, so actions are needed
now in a variety of areas, including:
Øadjustments to tax policies to favour insourcing
Øa levelling of the playing field with China,
which should be treated as a developed nation in areas that include currency
management, intellectual property protection and the enforcement of trade
agreements
Øa focus on building and keeping the world’s best
“talent base”
Øreconsideration of government regulations,
recognizing that – while protections for labour and the environment are needed
– regulations can impair competitiveness
Øthe creation of industry clusters
Øa focus on foreign manufacturers that want to do
business in the United States
Øa creation, by governments, of opportunities for
American businesses worldwide, including in China
·Companies should “do the math” and see what
“works” for them in the near, medium and long term; China should not be “the
default.”
POLITICS
OVER BREAKFAST
Juan
Williams, Fox News
·Over the last decade, more than half of the
population growth in the United States has occurred in the U.S. South; it is
estimated that, in the next 30 years, 40% of U.S. population growth will occur
in the South.
·Prior to his election as President, President
Obama was the most liberal Senator in the U.S. Senate.
·There are tremendous political and economic
changes under way in the United States.
·The biggest change affecting all other changes
is demographic change.
·Demographic change is concentrated in the U.S.
South but the trends are reflected nationally.
·Regarding the current U.S. population:
Øthe rate of U.S. population growth is astounding
Øthe racial composition of the U.S. population is
changing
Øthe birth rate of immigrants is high
Ø25% of the American population are now under the
age of 18 years
Ø25% of all children in kindergarten are Hispanic
Ømore than 50% of the American labour force are
female
Ømore than 40% of American executives are female
Øthe majority of people in college are female
Øthe number of females with college degrees has
doubled since the 1980s
Ølots of children reside in female-headed
households, and these households are often single-parent households
Øone end of the “barbell” is youth and the other
end is aging baby boomers.
·Regarding the U.S. population in 2025:
Ø25% of the population will be 65 years of age or
older
Ø50% of the population will be under the age of
35
Øthe population will be overwhelmingly white.
·Seniors love to travel, employ investment
counsellors, are “news junkies,” generally vote and love continuing education;
they are concerned about the price of pharmaceutical drugs, the viability of
Social Security and access to first-rate medical facilities.
·In general, seniors are relatively more likely
to be Republicans and youth are relatively more likely to be Democrats.
·Demographic change has affected American
politics, including the priorities that are pursued.
Juan Williams
posed questions to the Governors, who provided responses.
Question: What comments are relevant regarding growth in the Hispanic
population?
Response by
Governor Perdue: Women still face a “glass
ceiling,” many children in school do not speak English and funds are not
available for English-as-a-Second-Language training, and many immigrants to
North Carolina come from the Middle East and Asia and have good skills.
Response by
Governor Haslam: Tennessee has challenges in terms
of English-as-a-Second-Language training, and there is a need to do better
regarding kindergarten to grade 12 education.
Question: Is it true that Kentucky is in the midst of transformation?
Response
from Governor Beshear: At present, Kentucky is
focused on immigration and economic development, with Toyota leading an influx
of Japanese-owned companies and Japanese immigrants, among other developments.
Kentucky is a diverse state and welcomes diversity.
Question: Does diversity create political and social tensions?
Response
from Governor Beshear: Diversity creates political
and social tensions; that said, the recession resulted in a focus not on race
or language, but rather on finding a job.
Question: What changes are under way in Puerto Rico?
Response
from Governor Fortuño: Women are increasingly
well-educated and many are heading households, seniors are increasingly active
in their communities and as voters, and it continues to be difficult to entice
youth to participate in the political process.
Question: With much growth occurring in the U.S. South and the South being
the focus of much anti-immigrant legislation, how is the situation “playing
out”?
Response
from Governor Haslam: Politicians are playing to
their base and are not taking actions to push immigrants away.
Response
from Governor Beshear: Everyone wants an
immigration system that “works,” and illegal immigration is a national problem
that requires a national solution. Of the millions of immigrants in the United
States, some are in the country legally while others are illegal immigrants.
Many in Kentucky are focused on making people and businesses feel welcome,
regardless of religion or ethnicity.
Response
from Governor Perdue: More than 330 languages are
spoken in Charlotte, North Carolina. The state does not see deep-seated
discrimination or hostility toward immigrants, and North Carolina is trying to
be more – rather than less – inviting.
Response
from Governor Fortuño: Public safety is important,
and protecting the United States’ border is a major issue; protection of the
border increased as a priority after the September 2001 terrorist attacks.
Question: What actions are being taken by Governors to generate economic
activity?
Response
from Governor Perdue: States, and their Governors,
compete with each other for companies and thereby jobs, which are always the
first priority. North Carolina has a great deal of innovation and technology.
Education is key, and chief executive officers are looking at the long-term
quality of a state’s workforce; employers need a constant flow of properly
training employees.
Response
from Governor Haslam: Over the last 5 years,
Tennessee has focused on the kindergarten-grade 12 education system; it is now
working on alignment of post-secondary education with the needs of employers to
ensure the right quantity and quality of workers.
Response
from Governor Beshear: All states compete for
companies and jobs. The biggest question for employers is not tax incentives or
labour laws, but rather the quality of the workforce.
Question: What comments are relevant regarding the selection of
Representative Paul Ryan as the Republican vice presidential nominee?
Response
from Governor Perdue: The selection of
Representative Paul Ryan as the Republican vice presidential nominee is a bold
move. While the Presidential race is expected to be close, President Obama is
likely to be re-elected. North Carolina is a “battleground” state. The United
States is experiencing serious economic and social problems, and there is a
need to get beyond the rhetoric; Congress needs to focus on solutions that will
help the states.
Response
from Governor Haslam: The selection of
Representative Paul Ryan as the Republican vice presidential nominee is likely
to change the dialogue; the focus may shift to “big issues,” such as the U.S.
deficit and debt, rather than Republican presidential nominee Mitt Romney’s tax
returns. While it is expected to be a close contest, Republican presidential
nominee Mitt Romney is likely to win the presidency; the Senate and the House
of Representatives are likely to continue to be held by the Democrats and the
Republicans respectively.
Response
from Governor Beshear: The selection of
Representative Paul Ryan as the Republican vice presidential nominee is
interesting, although it is not clear what “audience” Republican presidential
nominee Mitt Romney gained with this selection; the Senate and the House of
Representatives are likely to continue to be held by the same parties as
currently. Kentucky is likely to support Republican presidential nominee Mitt
Romney, although President Obama is likely to be re-elected in a close race.
Kentuckians are “disgusted with it all,” and want common-sense solutions and
compromise. The United States would have recovered from the recession more
quickly if Congress could have worked with President Obama. The biggest constraint
facing the United States at this time is uncertainty. “Extreme” conversations
are dangerous and unhealthy for a country.
Response
from Governor Fortuño: The selection of
Representative Paul Ryan as the Republican vice presidential nominee was a bold
move; that said, everyone respects Representative Ryan. It would be helpful if
the campaigns begin to focus on the “big issues.” The next 3 months will be
key, and President Obama is facing some “tough headwinds.” There is some
concern about what happens after election day. Unlike Washington, the nation’s
Governors work together, as the Governors are “where the rubber meets the
road.”
Question: Are “audiences” at the extremes “reliable”?
Response
from Governor Beshear: The media need to understand
that most people are not watching television or listening to the radio.
Regardless of who wins the November 2012, an important consideration is whether
the focus will almost immediately become the 2016 elections.
ENERGY IN
THE AMERICAN SOUTH – TRENDS, PREDICTIONS AND POLICY CONSIDERATIONS
John
Somerhalder II, AGL Resources
·With improved technology, there is currently a
revolution in shale gas in the United States; technological innovations,
including horizontal drilling and fracking, have “spilled over” to shale oil.
·By 2030, the United States could be energy
independent because of the abundance of natural gas.
·Natural gas burns more cleanly than do other
fossil fuels.
·With a new tank capacity, it is now possible to
ship liquefied natural gas to new locations.
W. Paul
Bowers, Georgia Power
·Energy customers are benefiting from all types
of energy, and “all of the above” must be considered.
·The energy mix must include “all of the arrows
in the quiver”; for the long term, there is a need to be able to have a mix and
to rebalance as required.
·Developments occur on the basis of cost.
·Natural gas is displacing coal in some parts of
the United States.
·Customers should be engaged in energy-efficiency
efforts.
·While there is a place for all renewable energy
sources in the energy mix, the “economics” have to work.
Tony
Haymet, University of California at San Diego
·In recent years, the United States has restarted
its nuclear program, which is positive; developments in relation to shale gas
are also positive.
·Industry is “driven” by electricity, and
baseload electricity is critically important.
·Algae can be used to make fuel, and they do so
with incredible efficiency; algae double their mass in 24 hours.
Respectfully
submitted,
Hon. Janis G. Johnson, Senator
Co-Chair
Canada-United States
Inter-Parliamentary Group
Gord Brown, M.P.
Co-Chair
Canada-United States
Inter-Parliamentary Group