Improved North American Coordination on Essential Functions Policy Simply Cannot Wait

As U.S. COVID-19-related deaths hit increasingly grim milestones, no one needs a reminder of the immense toll the virus is taking on American families and our overburdened healthcare system. Our North American neighbors face a similarly drastic situation as both Canada and Mexico also experience crippling surges in infections. Yes, vaccines are coming, but they won’t be administered in time to avoid what top U.S. policy experts warn is likely to be the most difficult period in the history of our public health.

Predictably, North American economies that showed signs of mending over the summer are again under severe duress as mounting infections provoke renewed lockdown measures. In the case of the U.S., weekly first-time claims for unemployment recently surged above 850,000, topping the consensus forecast by nearly 17%, and the latest Federal Reserve Beige Book report showed economic conditions deteriorating across the country. It’s the reason the U.S. Chamber has, for months, had no greater priority than convincing lawmakers to approve an urgently needed additional rescue package for small businesses.

One of the lessons that nine months of the pandemic has taught us is that, while prioritizing the public health response is paramount, safely preserving essential economic functions, industries and services is just as important if we are to avoid economic calamity. Few elements are as vital to this effort as ensuring functionality of highly integrated North American supply chains. This begins with the critical supply of personal protection equipment (PPE), illustrated by the fact that the U.S. is dependent on Canada for 24% of our imported protective garments for healthcare workers, and on Mexico for 22% of our imported hand sanitizer supply.

The most integrated continental trading relationship in the world also features supply chains in agriculture key to our food supply, in defense/aerospace crucial to our national security, and in innumerable other manufacturing sectors that collectively support more than 12 million U.S. jobs. We highlighted this last spring when massive pandemic-induced supply chain dislocation between the U.S. and Mexico threatened deprivation and massive job losses in both countries. To their credit, the two governments responded by aligning policy sufficiently to avoid temporary dislocation in the most critical areas.

But what has become clear in recent weeks amidst spiraling infections is that the U.S., Canada and Mexico simply have not coordinated sufficiently to harmonize essential functions policy. This is evident in recent lockdown mandates across jurisdictions such as the State of Illinois, the Mexican State of Chihuahua, and regions of the Canadian Province of Ontario, where the only commonalities are the uncertainty and unpredictability that hastily devised patchwork rules and regulations have imposed on essential businesses and services. The automotive sector, which supports nearly 4 million jobs across the continent, foretells broader problems to come as supply chain challenges have recently forced Ford, GM and Toyota to cut or halt production across key vehicle lines.

Fortunately, the recently implemented landmark U.S.-Mexico-Canada Agreement (USMCA) provides the three countries with a tailor-made framework to align essential functions policy. Appropriate policymakers from each nation should come together under the auspices of the North American Competitiveness Committee mandated by USMCA’s Chapter 26, an innovative element of the agreement designed to, among other things, “strengthen regional growth, prosperity and competitiveness.” Nothing could be more relevant to these goals than ensuring integrity of shared supply chains and harmonized continental essential services policy through what’s sure to be the most challenging period of the pandemic.

As we’ve previously expressed, policymakers should be guided by a well thought-out, comprehensive framework that’s been thoroughly vetted by healthcare experts, such as the guidelines established by the U.S. Cybersecurity and Infrastructure Agency (CISA). Also imperative is the need for essential services policy to be closely coordinated across federal, state, provincial and municipal jurisdictions.

As we’re all too painfully aware, the virus waits for nothing and no one. And we cannot afford even a moment’s delay in enhancing coordination among North American allies to mitigate the pandemic’s devastating economic impact.