In an insightful, exclusive Q&A with Catalyst, Canadian Consul General Phyllis Yaffe explains how the historic, unprecedented relationship between Canada and the United States is mutually beneficial for both of our nation’s economies and our safety; and expresses why it’s imperative that we keep it going strong.
*This interview was conducted prior to the signing of the United States-Mexico-Canada Agreement.
Canada and the United States have traditionally been among the world’s strongest allies and trade partners. Can you provide a bit of background on the nations’ relationship and why it remains critical to world peace and prosperity?
Canada and the United States have a truly extraordinary relationship. We have the longest, most peaceful and mutually beneficial partnership of any two countries in the history of the world.
As allies, we tackle common security issues both at home and beyond our shared border. Our soldiers have served side-by-side in many conflicts since World War II, and continue to collaborate as founding members of the North Atlantic Treaty Organization (NATO). In May, we celebrated the 60th anniversary of the North American Aerospace Defense Command, a Canadian and American defense organization that monitors and protects North American skies and waterways.
In fact, it was NORAD that was responsible for grounding all aircrafts in American airspace on that tragic day of September 11th, and — most people don’t know this — it was the Deputy Commander, a Canadian General, at the helm leading that mission. But NORAD is more than just a defense agency for North America — it’s a symbol that exemplifies the profound historic bond our two nations share.
As trading partners, our economies are deeply intertwined. Our industries rely on each other, and create well-paying jobs and new business opportunities in both countries. Every day, almost $2 billion in trade and 400,000 people cross our shared border. Our bilateral trade is both fair and balanced and this is really important to underline as there appears to be some confusion on this point. We buy more U.S. goods than China, Japan and the United Kingdom combined!
The Canada-U.S. border represents the largest trading relationship and the most enduring security partnership in the world. This joint approach has allowed us to bring forward a unified front internationally while advancing the prosperity of our citizens in North America. Ensuring we do not take this for granted is paramount to continuing to secure the stability of our continent and to share our values and everything we stand for with the world.
Throughout history, various industries have benefited enormously from the Canadian/U.S. trade partnership. What are some of the industries that have the most to gain from a continued trade alliance, and consequently, would lose the most if the relationship between these nations suffered?
I think it’s fair to say that countless industries have benefited from the Canada-U.S. trade partnership, especially since the signing of NAFTA. We share a trillion dollar trade and investment relationship, supporting roughly 9 million jobs across the United States. This trillion dollar trade relationship represents a threefold increase since 1993 — the year before NAFTA came into force.
And consider this: we don't just sell things to each other — we make things together. Nearly half of all U.S. imports from Canada are raw materials and intermediate goods used by American manufacturers to produce goods across all industries — transportation, metals, machinery, agriculture and energy. Many of these goods are often exported back to Canada, either to sell to Canadians as a final product, or to continue down the assembly line for final production, illustrating our cross-border supply chains and integrated economies. Without a doubt, we have built the most successful joint production platform the world has ever seen.
The Trump administration imposed tariffs on a variety of Canadian goods, under the guise of national security. In response, Sen. Toomey, R-PA, has co-authored legislation that would require Congressional approval of such a move. What are your thoughts on this legislation and any other legislation that would require a system of checks and balances for purposes of levying tariffs?
The way Congress legislates and oversees internal processes is a topic for our American counterparts to sort out.
I will say, however, that since the U.S. tariffs on Canadian steel and aluminum were announced, I have been very vocal in expressing Canada’s concerns with the Administration’s decision. The idea that Canada could be considered a national security threat to the United States is inconceivable and disconcerting.
In my conversations, I remind our American partners about the facts: the U.S. has a $2 billion surplus in steel trade with Canada. Our steel and aluminum industries are highly integrated and support critical North American manufacturing supply chains that are essential to our shared economic prosperity. We sell and buy different types of steel to and from each other. These tariffs threaten to dismantle a very efficient system that has allowed us to better compete globally.
Recently, the PA Chamber and the Ontario Chamber of Commerce issued a joint statement calling for the renewal of NAFTA to strengthen cross-border trade. How critical is NAFTA to ensuring that both Pennsylvania and Canada can continue on a path to economic prosperity?
The U.S. Chamber of Commerce estimates that 500,000 jobs in the Keystone State depend on NAFTA. The Chamber also reports that nearly two-fifths of Pennsylvania exports head to customers in Canada and Mexico, generating more than $13 billion in revenue. And a vast majority of Pennsylvania’s aluminum (77 percent), motor vehicle (71 percent) and glass product (68 percent) exports go to Canada and Mexico. I think those numbers alone clearly illustrate what NAFTA has allowed for small and medium-size businesses in Pennsylvania; but they also represent how Pennsylvania jobs and businesses could suffer if NAFTA is not renewed.
It’s also important to reiterate that we don’t just sell things to each other; we make things together for the global market. Under NAFTA, we’ve been able to build the biggest economic zone in the world — a U.S. $21 trillion dollar regional market of 481 million consumers. Put another way: with only 7 percent of the world’s population, Canada, the U.S. and Mexico generate 28 percent of the world’s GDP. That is a remarkable and unparalleled ratio!
NAFTA has generated significant business and substantial new opportunities for Americans, Canadians and Mexicans.
The PA Chamber has heard anecdotally that immigrants who come to the U.S. to be educated, work and raise their families are having difficulty remaining in the U.S. due to the nation’s outdated immigration laws, and are instead heading to Canada for new opportunities. What are your thoughts on how the U.S. can improve our immigration laws to ensure that we can attract and retain talent from around the world?
When it comes to U.S. immigration processes, again, that's really a question for our American counterparts to answer.
In Canada, I can tell you that immigration remains a key economic driver that supports job growth and strengthens our national identity. Prime Minister Trudeau has said it time and time again — diversity is our strength. We look to immigrants for their innovative perspectives, entrepreneurial spirit, global experience and unique skill sets. And to keep Canada competitive on the global stage, we have implemented a multiyear plan and economic programs to attract top talent to help grow Canada’s economy and meet labour shortages, which are a result of our aging population.
Your team has made several outreach visits to Pennsylvania this year alone. Can you provide an overview on the stops you’ve made, conversations you’ve had and progress you’ve reached with local government and business leaders throughout the Commonwealth?
Since I arrived in the United States in 2016, my team and I have crisscrossed the Commonwealth, from the traditional hubs of Philadelphia and Pittsburgh to Harrisburg, Allentown, State College, Williamsport and York. While all of these places each have their distinct character, our message has been consistent: Canada and the Keystone State enjoy a truly special relationship, a shared historical and cultural heritage, and a common vision of prosperity for our people.
I have been fortunate to have great conversations with leaders across Pennsylvania — I have met with Governor Wolf, state legislators, labor organizations, community leaders, academics and business owners. One of the key points I make in nearly every conversation is that Canada’s relationship with Pennsylvania is a strong example of the close links between people and our businesses: trade between Canada and Pennsylvania supports more than 346,000 jobs in Pennsylvania, and our fair and balanced trade continues to serve as an engine for growth on both sides of the border — particularly for the middle class.
Some of the visits you’ve made over the last few years include visits to Harrisburg, where you’ve sat down with PA Chamber President Gene Barr for roundtable discussions where several of our members have been present. How valuable do you find these discussions to be, and how do you value your office’s relationship with our chamber of commerce, and with chambers of commerce in other states?
My team and I cover a large territory that has a population nearly the size of all of Canada — but I have to say that my visits to Harrisburg are a highlight of my time in the United States. Discussions with Gene have been engaging, thoughtful and pertinent, and I very much value the opportunity to connect with the Chamber and its members. I find that the Chamber is an active voice, including on trade and business development on both sides of the border. The Chamber also serves as a link to businesses, both large and small, and to Pennsylvania communities and families. The Pennsylvania Chamber, and regional chambers throughout the Commonwealth and beyond, have their finger on the pulse of the business community and issues of importance to them. In that regard, we value our relationship with the PA Chamber and other like-minded organizations to guide our thinking as we strive to make our already strong relationship more fruitful and productive.
Phyllis Yaffe is Consul General of Canada in New York.
Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.