This section suggests some general questions, then, under Going Deeper, looks at the case from the standpoint of some fundamental ideas in political science.

Adequacy of national treatment to cope with integration

One major question raised by the case is whether national treatment is an adequate basis for setting in motion a process for deepening North American economic integration. National treatment is a concept based on trade as it traditionally occurred. Traditional trade law assumes trade occurs between separate organizations "at arm's length" (i.e. not within the same organization) and for competing goods rather than complementary ones. NAFTA-and most of global trade-works otherwise: it is managed within multinational enterprises (MNEs) that "fragment" or distribute production of key components of a products to different areas where the work can be done most efficiently. These components are complementary and exchanged back and forth as the assembly of the product is carried out.

1. Why are WTO trade treaties structured around national treatment or non-discrimination rather than normative standards? The WTO does contain some standards that depart from National Treatment, such as the TRIPS agreement (Trade Related Aspects of Intellectual Property standards) and harmonization of Rules of Origin. The EU, however, operates on standardizing national laws of member countries around community standards.
2. Why do you think North America is different?
3. Why worry about border crossing time or regulations? The trading just described happens globally as well as within regions, but it is especially important for North American manufacturers in that it takes advantage of geographic dispersal and low transportation costs to maintain cost competitiveness. With well-managed supply chains, companies can minimize inventory and maximize throughput (i.e. volumes of materials flow) for greater economies of scale. But the system also depends on frictionless, no-surprises border crossing. Having to comply with regulatory differences that have no material impact on regulatory results also runs up the costs of operating North America as an integrated economic platform. Indeed, as the case points out, the SPP process underlined the priority of what NAFTA working groups of regulators from the NAFTA countries were already labouring over in order to keep the system evolving to meet the imperatives of good economic performance.

Going Deeper

Students could also try their hands at critiquing the way policy was handled by discussing the themes introduced below.

Theme: Managing the Process

The SPP process, which continued the practice of operating without over-arching institutions, instigated a more centralized approach to the bureaucratic cooperation that underpinned the day-to-day operations of NAFTA and innovated by bringing together security and prosperity as parallel tracks in a single process. The low-visibility approach taken by its managers was designed as a response to the narrowly-based yet high visibility civil opposition manifest throughout the 90s outside WTO, IMF, G-7 and other multilateral meetings associated with trade liberalization.

One might well begin to probe the rationales behind the SPP Process and its unwillingness to engage in political debate.

**Instructors could at this point decide how much more information to provide. For example instead of just moving into the information below, 15 minutes of debate on the pros and cons of taking the low-visibility approach could precede the disclosure of the following**

NAFTA, like all trade agreements, was negotiated behind closed doors, with occasional consultations throughout the process with stakeholder groups in order to understand better different proposals that emerged during the talks. Although negotiation approaches may differ, the trade agreements are never revealed for public comment until the final agreement is ready to be signed.

1. Can students suggest why this is so? One answer is that every concession rests on every other concession and so the whole is a carefully balanced framework of concessions that represents the best the negotiators on all sides can achieve to expand market opening and non-discriminatory treatment of foreign firms.
2. Given the tradition of non-transparency of trade negotiations, do students think it contributed to the approach taken by the three governments to manage the SPP process? Or should trade agreements be negotiated publicly?
3. What kind of trade agreements would emerge from a fully public process?
4. Why are trade agreements negotiated behind closed doors by professional trade negotiators rather than politicians?

Theme: The Political Philosophy of the State

The SPP stress on getting results based on administrative actions by bureaucrats also opens the door on some other reflections about the state and the transparency of executive branch operations.

1. Are there or should there be areas of state activity exempt from direct control by the legislature?

From the time of kings, the question has been asked whether the king is bound by his/her own laws. Machiavelli and Hobbes for different reason felt the answer was no; Locke, ambivalent, is unclear. US Constitutional practice is likewise unclear: much of the Bush administration's conduct of the "war on terror" was aimed at expanding the powers of "The Commander in Chief" function of the Office of the President, including exempting it from legal restraints undertaken by treaty. The US Constitution-a system of laws-may nevertheless grant to its head of state the powers necessary to serve the interests of the state-the issue is one of limits.

In Westminster Parliamentary countries, where the head of government is separate from the head of state, the "black ops" agencies are sometimes run through funding related to the head of state to shield them from Parliamentary scrutiny. What are or should be the limitations of exchanges between executive branches of government? If they involve no new spending then what right has the legislature to be informed, let alone "advise and consent"?

1. Is the bureaucracy the servant of the executive branch exclusively or does it owe a duty to the legislature?

In Hegelian idealist theories, the State is understood as the incarnation of reason and thus a Rechtstaat as an embodiment of law. Weber's model of an expert civil service executing the laws with strictly disinterested non partisan objectivity is part of the Hegelian model of a Rechstaat. Countries organized under a Roman Law system also typically have grey zones where Reasons of State trump the powers of legislatures to dig deeply.

In contrast, in Westminster-style Parliaments-especially since the Thatcher reforms in the United Kingdom (UK)-senior bureaucrats are required to take responsibility for executing certain programs and targets. Executive departments, or parts of them, have become semi-privatized as so-called Special Operating Agencies and are held to account for fulfilling their contracts. Canada also adopted such reforms to a more limited degree.

Nevertheless, in all countries operational transparency of the Executive Branch is limited and in the absence of direct funding measures, the powers of legislatures to call governments to account is less than complete.

1. Was it therefore so strange that governments thought SPP would remain remote from public scrutiny?

Another aspect of this question is discussed below-the question of regulation

Theme: Regulation

Regulation is generally not passed directly through legislatures. Rather it is delegated to executive branch departments and agencies. The difference is that departments are headed by a cabinet member. Agencies heads are usually appointed by the government without necessarily any direct legislative control. Regulation is carried out by "independent" regulatory agencies with reference to authorizing statutes. But the processes and effectiveness of the regulations is ultimately overseen by courts on the basis of complaints.

At the same time, in most democratic countries, regulation also represents an equilibrium between the parties affected by regulation. For example, pesticide regulations in Canada generally recommend usage quantities less than those recommended in the US. The Canadian climate is on average colder and growing seasons shorter: less is required to do the job. Canada is also a northern country where night falls relatively early for much of the year. Canadian auto regulations mandate running lights all day because under Canadian motoring conditions, they have been found to reduce collisions. Manufacturers have learned to cope with these differences from the larger market.

But as competition increases, pressures for cost cutting those kinds of cost differences can translate into pressure to shift production. Yet, at the same time, the regulatory differences-however minor-often have a justification in public health. Many observers in Canada feared that SPP's pressure on regulatory "harmonization" would lead to "convergence" to the detriment of Canadian practice. Instead of a close analysis of risk-benefit calaculation, Canadian regulators would be required to conform to the norms of the largest market in the name of production efficicncy.

1. How justified are those fears? What would be the best way to combat them? (Hint: would transparency have been better?)

Theme: NAFTA

The case also points to different strategies suggested by NAFTA proponents to overcome the limitations on growth and development of further integration. One of these, the so-called "Big Idea" would have re-launched the debate about NAFTA along the lines of gains available from confronting the issues at a strategic level and redesigning it for the 21st century.

1. Was there a more strategic approach to regulation-besides going one by one-that would have better served SPP objectives? (See the suggested reading by Bruce Doern below) Should that have been tried? Can you suggest why it was not? See Pastor 2001 (Chapter 5), in the suggested readings below.
2. The case author suggests combining commerce and the DHS vision of security in the SPP process-while innovative-led to missed opportunity. Better would have been to let Canada and Mexico rework the mix of security and commerce outside the DHS paradigm. How well founded is this judgment?

NAFTA's single success was its just-in-time cross border supply chains. For the businesses involved, security meant keeping the supply chains moving: containers sealed at source and tracked along the journey to ensure they were not diverted would be safer both in terms of security and in terms of disruptions to manufacturing operations. DHS, in contrast, equated security with Stop and Search. While paying lip service to the importance of trade and keeping supply chains moving, DHS priority was preventing an attack. Their nightmare scenario was a nuclear weapon or deadly biological agent entering the US after which it would circulate freely until used. They viewed the border as an absolutely critical check point. The impact of this approach was to "thicken" the border and impose less efficient manufacturing techniques on supplier: costs of border delays were measured in the millions of dollars an hour. Canada's response was to develop a "Smart Border" approach using technology and preclearance to facilitate border crossing. But ultimately, the border thickened by a large factor, leading companies to switch from the lean inventories of Just in Time to a "hedged" version, known as "Just-in-Case.

Dr. Golob's argument is that combining these two policy streams which are traditionally separate in North American relationships worked against creative solutions and instead subordinated commerce to security as defined by the US administration.