Researched and written by Miranda Harris Hamlin, PNWER Policy Intern. Miranda is currently a senior at Seattle University studying Economics.

PNWER kicked off the decade with visits to several of our jurisdictions' capitals last month. PNWER traveled to Olympia, WA, first before heading to Juneau, AK, and Boise, ID. PNWER will visit the capitals of our other jurisdictions, Ottawa, and Washington, D.C. in the coming months. ​These annual capital visits allow PNWER delegates and stakeholders to meet with key government, legislative, and private sector leaders to discuss issues important to our region. 

​The PNWER Delegation traveled to Olympia for meetings on January 21. The delegation included Montana State Senator Mike Cuffe, PNWER President; Oregon State Senator Arnie Roblan, Past PNWER President (2017-18); Melanie Roberts, Pacific Northwest National Labratory; Dan Kirschner, Northwest Gas Association; Bruce Agnew, Cascadia Center and ACES NW Network; Nirav Desai, Moonbeam; Bryce Campbell, Consulate General of Canada - Seattle; Matt Morrison, PNWER CEO; and Brandon Hardenbrook, PNWER COO as well as additional PNWER staff.

During the visit to Olympia, the PNWER delegation presented to the House Innovation, Technology, and Economic Development Committee on regional innovation and its contributions to Washington State. Matt Morrison provided an overview of PNWER's 2019 Economic Leadership Forum held in Seattle in November which focused extensively on regional innovation across sectors. Bruce Agnew highlighted the Forum's discussion on Automated, Connected, Shared, and Electric (ACES) mobility and the emergence of 5G technology. Brandon Hardenbrook then explained PNWER's Center for Regional Disaster's (CRDR) recently completed project on Using Unmanned Aerial Systems (UAS or drones) for Inspecting Critical Infrastructure and recommended that Washington establish a state-wide UAS Coordinator. Lastly, Nirav Desai, PNWER's Innovation Co-Chair, shared the results of a joint project between PNWER and the University of Washington which mapped out innovation hubs across the PNWER region. A recording of PNWER's presentation to the committee can be found here.

PNWER delegates also presented to both the House and Senate Agriculture Committees on the importance of continued financial support for preventing invasive quagga and zebra mussels in the Columbia River Basin and regional development in precision agriculture as well as highlighting examples of best practices in forest management including how Oregon is fighting wildfires. During these hearings, Senator Cuffe described the negative economic impact of invasive quagga and zebra mussels in the Columbia River Basina as well as explained the value of Cross-Laminated Timber (CLT) which will be showcased at PNWER's Annual Summit in Big Sky, Montana, in July. Brandon Hardenbrook then presented on the autonomous and precision agriculture technologies that were demonstrated during the PNWER Annual Summit in Saskatoon, Saskatchewan, in 2019 and described the potential that these technologies offer to the region. Senator Roblan closed with a presentation on Oregon's efforts to contain and prevent wildfires, highlighting Oregon's use of fire insurance to help cover the costs to the state. A recording of the House presentation can be found here, and the Senate presentation can be found here. 

Lastly, the PNWER delegation presented to the House Environment and Energy Committee. Matt Morrison began by providing highlights from the Smart Grids and 5G Technology sessions at PNWER's 2019 Economic Leadership Forum and explained the Legislative Energy Horizons Institute (LEHI) program. Senator Roblan discussed the Oregon State Legislature's new approach to carbon pricing, which is currently on the docket. Melanie Roberts from PNNL and Dan Kirschner from NWGA also provided comments. A recording of the presentation to the House committee can be found here. 

Delegation members met for one-on-one meetings with Lieutenant Governor Cyrus Habib; the Office of Senator Steve Hobbs, Transportation Committee Chair; Lauren McCloy, Governor Jay Inslee’s Senior Energy Policy Advisor; Minority Leader Representative J.T. Wilcox; Representative Zach Hudgins, Chair of the Innovation, Technology & Economic Development Committee; Senator Lisa Wellman, Environment, Energy & Technology Committee; Representative Mary Dye; Representative Cindy Ryu; Senator Jim Honeyford; and Representative Sharon Wylie, Transportation 1st Vice Chair. Meetings covered a wide range of topics from the United States-Mexico-Canada Agreement (USMCA), invasive quagga zebra mussels, infrastructure financing, retraining displaced workforces, and the importance of technology in regional innovation.

The PNWER delegation visited Juneau, Alaska, on January 22-24. During the visit, Senator Cuffe met with several Alaska legislators and PNWER delegates on regional economic issues. PNWER was also hosted by Senator Mia Costello at a Lunch and Learn on January 23 in the Capitol. At the Lunch and Learn, attendees heard from Consul General Brandon Lee, Senator Mike Cuffe, and Matt Morrison about the current U.S.-Canada relationship and the projects that are underway that benefit Alaskans and the region.

The delegation met with Lieutenant Governor Kevin Meyer to discuss several topics related to transportation, economic development, and the Arctic. Lt. Gov. Meyer is the Office of the Governor's lead to PNWER and is a great proponent of the economic growth of Alaska and the region. 

​Rounding out the visit, PNWER and members of the Consul General staff in Seattle met with the Alaska Marine Exchange in Juneau to learn more about the maritime domain management occurring out of the operations center in Juneau. The meeting showcased the systems the Exchange has in place and the work they are doing to improve the safe transit of vessels through Alaskan waters.

In addition to the above meetings, the PNWER delegation visited the following offices of Senate Majority Leader Lyman Hoffman, Senate Minority Leader Tom Begich, Senator John Coghill, Senator Mia Costello, Senator Jesse Kiehl, Senator Bert Stedman, Senator Gary Stevens, House Minority Leader Lance Pruitt, Representative  Chuck Kopp, Representative Chris Tuck, and Representative Adam Wool.

The PNWER delegation traveled to Boise, Idaho, for meetings on January 27-29. Topics included specific issues impacting Idaho including Aquatic Invasive Species Funding, Precision Agriculture, Unmanned Aerial Systems, Transportation and Infrastructure, Columbia River Treaty, U.S.-Canada Trade, Legislative Energy Horizon Institute, and Cybersecurity. 

PNWER delegates and staff participated in a hearing in the Senate Agriculture Committee chaired by Senator Jim Gutherie. Brandon Hardenbrook and Patrick Kole, Idaho Potato Commission and PNWER Agriculture Co-Chair, gave an overview of recent working group activities focused on Agriculture technology and precision farming. This overview included a description of the demonstration of autonomous farm equipment during the PNWER Annual Summit in Saskatoon this past July. Matt Morrison gave an update on recent changes to federal funding for inspection stations to stop the spread of aquatic invasive mussels. Through PNWER's efforts, $18 million in federal matching funds is now available to 16 states. Finally, former Montana SenatorJohn Brenden invited committee members to Big Sky, MT, for the upcoming PNWER Annual Summit in July. 

The delegation also participated in a hearing in the Senate Transportation Committee chaired by Senator Bert Brackett. Brandon Hardenbrook and Bruce Agnew, Cascadia Center and PNWER Transportation Co-Chair, gave an update on PNWER's recent activities relating to Unmanned Aerial Systems (UAS) and stressed the need for a UAS coordinator in each state. Idaho is poised to become the first state in the region with an official UAS coordinator. Bruce Agnew also discussed truck size-weight issues, autonomous vehicles, and PNWER's efforts to improve large infrastructure projects in the region. 

The PNWER delegation was introduced on the House Floor by Representative Rick Youngblood, previous PNWER Economic Development Co-Chair. Following the introduction, PNWER hosted a legislative luncheon for members of the House and Senate to provide updates on current activities. Senator Chuck Winder, PNWER Vice President, introduced the delegation and provided remarks about the upcoming Legislative Energy Horizon Institute (LEHI) and the planning for the PNWER Annual Summit.

While in Boise, PNWER also met with Governor Brad Little to discuss several issues including invasive species funding, infrastructure permitting, and cybersecurity. They also addressed USMCA which was recently ratified by the U.S. Canada's Consul General Brandon Lee provided an update on the where the trade agreement stands in Canada's Parliament, which is expected to vote to approve the agreement very soon.

Other one-on-one meetings included discussions with Lt. Gov. Janice McGeachin, Speaker Scott Bedke, Senate Pro Tem Brent Hill, Senate Minority Leader Michelle Stennett,  Representative John Vander Woude-Chair of the House Environment, Energy, and Technology Committee, and Scott Pugrud-Director of the Idaho Office of Species Conservation and the lead of Governor Little's Salmon Working Group.

This spring and summer the Pacific NorthWest Economic Region (PNWER) Innovation working group had the opportunity to work with Seattle-based startup Moonbeam Exchange and a team of graduate students from the University of Washington Master of Administration Applied International Studies (MAAIS) in the Jackson School of International Studies.  The team exceeded our expectations on research into clusters of economic development and forming recommendations on how the region could collaborate in specific sectors.

The team conducted a study of the economy of the Pacific Northwest to identify key innovation drivers, capabilities, gaps, and opportunities borne from collaboration across the region. They leveraged a variety of data sets including government R&D spend, startup activity, and extensive subject matter expert and influencer interviews. Through this analysis they identified nascent clusters of economic activity that could be nurtured through public/private partnership, specifically:

• An emerging cargo drone hub in Anchorage;
• An opportunity to build a public safety-related technology hub in Calgary;
• A potential pivot toward medical devices and wearables in Portland;
• And global centers of excellence in AI and immersive tech in Seattle and Vancouver.

PNWER has worked for years to foster innovation and cooperation across the region.  The team’s subsequent recommendations were shared with PNWER and have been approved by its leadership at the Annual Summit held in Saskatoon, Saskatchewan. http://www.pnwer.org/2019-summit.html

Next steps for the project will be to share the report widely with our stakeholders and work towards implementing the recommendations over the next year.  Please take the time to review the great work the team put forward and provide feedback on how the region can leverage the innovation cluster currently in the ecosystem. 

Damian Allen, MAAIS Graduate
Nina Gerber, MAAIS Graduate
Jose Luis Gomez, Jr., MAAIS Graduate
Arafat Sawabon, MAAIS Graduate

Nirav Desai, CEO, Moonbeam Exchange - PNWER Innovation Working Group Co-Chair
Matt Morrison, CEO, PNWER
Steve Myers, Sr. Program Manager, PNWER
​

Confused about the difference between NAFTA and USMCA? Check out this graphic from PNWER partner the Pass USMCA Coalition. 

We applaud the announcement today regarding the agreement reached to lift steel and aluminum tariffs on Canada and Mexico and associated retaliatory tariffs. PNWER has focused on this issue as a top priority for the region for the past year. This important step helps clear a major hurdle in all three countries in finalizing the US-Canada-Mexico Agreement (USMCA).
 
“I applaud the announcement today. When markets are open and goods are transported freely across borders, the result is economic growth, new businesses and more and better job opportunities for individuals.”, said PNWER President Larry Doke, MLA Saskatchewan.
 
Oregon Senator Arnie Roblan, Past President of PNWER said, “Here in the Pacific Northwest, we are stronger by working closely together, and our relationships are intact because of the ongoing partnerships in every major sector of our economy, and in state, provincial, territorial, local, and tribal governments, this announcement helps us to maintain these important relationships.
 
"This is great news, said Matt Morrison, PNWER's Executive Director, " PNWER has worked for the past 12 months to encourage the Administration to remove the Section 232 Tariffs, and Canada and Mexico to agree to the removal of their retaliatory tariffs, all of which have significantly impacted our farmers, ranchers, and manufacturers in both countries in our Pacific Northwest region."
 
The US and Canada’s trading relationship is incredibly important to the Pacific Northwest. The US and Canada have the largest trading relationship in the world, and here in the Pacific Northwest, we benefit from the two-way trade of over USD $541 billion (CAD $630 billion) annually, of which about USD $22.6 billion (CAD $29 billion) is in the Pacific Northwest.

President Donald Trump of the United States, former President Enrique Peña Nieto of Mexico, and Prime Minister Justin Trudeau of Canada signed the United-States-Mexico-Canada Agreement (USMCA) in November of 2018 to replace NAFTA. The new deal proposes a number of updates to the old agreement which has governed North American trade since 1994.

USMCA includes a number of new provisions intended to benefit North American firms while liberalizing trade between the three partner states. For instance, the USMCA raises wage floors for automotive workers and tightens country-of-origin requirements. The deal addresses restrictions on dairy trade between the United States and Canada, and contains a pledge to refrain from currency manipulation, which were issues unresolved by NAFTA.

The USMCA also includes a sunset clause scheduling legislative reviews and possible modifications for every six years. This stipulation allows for periodic adjustments in the event that portions of the deal are less efficient than projected.

Although the three executives support the agreement, the deal still needs to be ratified by the legislatures of the partner states in order to be enacted. In Washington, D.C., it is unclear about the future of the agreement. Members of Congress have indicated that there are components of the USMCA that should be improved. Like all trade agreements, there is gain for every signatory. Agreements are not designed to prioritize the interests of one country over those of its partners.

It is worth noting the magnitude and importance of trade between the United States and Canada. The U.S.-Canada trade partnership is one of the largest in the world. The total value of trade between the two countries reached $673 billion in 2017 -- Canada’s largest partner is the United States, and is the United States' second largest trading partner. Canada is the largest goods export market for the United States at $282.3 billion in 2017, and 76% of all Canadian exports are to the United States. The U.S. Trade Representative estimates that 1.2 million U.S jobs are supported through this export market alone. Canadian foreign direct investment (FDI) in the United States has also increased substantially in recent years, led by manufacturing, wholesale trade, and finance.

Uncertainty over North American trade against a backdrop of tariffs and tariff retaliations jeopardizes the stability of the U.S.-Canada trading partnership. If action is not taken soon and barriers to trade persist, exports and FDI will suffer. Decreasing international competitiveness among firms means that those exporters will lose their hold on foreign markets as more competitive foreign producers gain access. This was the case of U.S. soybean exports when protectionist policies escalated between the Trump and Xi Jinping administrations. There is a chance that those soybean exporters might never regain the market access they held in China.

The likelihood of the USMCA’s ratification has dominated debates and commentary over the future of the deal. The agreement still faces a series of hurdles in Congress on its path to ratification. U.S. Trade Representative Robert Lighthizer is currently meeting with lawmakers to brief them on the USMCA’s provisions. Members of Congress have expressed concerns with a few components of the agreement. Some are worried about deal’s implications for labor standards. They point to the fact that the Mexican government may not update its organized labor laws according to the deal’s stipulations. In this case, they argue, there is no adequate means of enforcing the agreement and protecting Mexican workers. Speaker of the House Representative Nancy Pelosi (D) has gone as far as to say that there will be no vote on the agreement until Mexico reforms its labor laws. The Mexican government claims that it is in reach of passing these reforms before a congressional recess in late April.

Other dissenting legislators criticize the deal for its intellectual property rights concessions to large pharmaceutical companies. On the other side, pro-business interests attack measures which weigh on free trade, like country-of-origin requirements for automobile parts.

Legislators on both sides of the aisle have called for the removal of steel and aluminum tariffs as a requisite for the deal’s ratification. Recently, Finance Committee Chairman Senator Chuck Grassley (R) echoed this demand. Canadian officials have indicated that the passage of the agreement in Parliament is contingent upon the removal of Section 232 tariffs on steel and aluminum. Critics argue that these tariffs, which the Trump administration implemented on grounds of national security, constrict free trade and cause political friction at odds with the spirit of an international trade agreement. Business leaders across the United States, as well as non-profits like PNWER, have advocated for the removal of the Section 232 tariffs, which hurt firms across borders.

The USMCA enjoys its most robust support from private sector actors. In February, a coalition of firms and organizations including the U.S. Chamber of Commerce, the National Association of Manufacturers, Fiat Chrysler Automobiles, and the American Farm Bureau Federation pledged their support for the deal. A number of other American manufacturing and agriculture-related organizations have also come out in support of the agreement.

The future of the USMCA is uncertain, as the vote which Trump and many Republicans hope to reach this summer is not yet guaranteed. The U.S. International Trade Commission will publish economic projections of the USMCA by April 19, an evaluation which may sway legislators in favor of or against the agreement. However, the political trappings of ratifying the agreement may weigh just as heavy as any economic analysis. Democrats are aware that approving the deal would mean a major policy victory for Trump, prefacing his run for re-election. Partisan calculations will certainly present another obstacle for Trump and Lighthizer as they push the agreement toward Congress this summer.

Speaking pragmatically, if the USCMA is not ratified, trade will most likely continue according to NAFTA’s provisions, but it is unlikely that the 232 tariffs will be lifted. Some firms can request waivers for those tariffs, but this complicates business operations and not all companies are even aware of this option. Ideally, legislators and the U.S. Trade Representative will resolve disputes over labor and environmental standards and freedom of trade in a timely manner. However, these demands are, to an extent, antithetical, and a compromise deal which satisfies all parties is unlikely to emerge in the near future. In light of persisting tariffs, it is worth asking ourselves: if the USMCA is not ratified, where do we go from here?
​
By Daniel Green, PNWER Policy Intern. Daniel is a senior undergraduate student at the Jackson School of International Studies at the University of Washington.

Resources:
Pelosi Says the House Won’t Hold USMCA Vote until Mexico Changes Labor Laws 
Market Watch- April 2, 2019  

Trump Trade Deal with Canada, Mexico Still Faces Hurdles 
​Boston 25 News- April 1, 2019

Guest Opinion: Congress Must Approve Canada/Mexico Trade Agreement
Idaho Politics Weekly- March 31, 2019

Mnuchin: Lifting Tariffs Part of Plan for USMCA Passage
Politico- March 15, 2019

Democrats Cool Toward NAFTA Replacement, Question Labor Standards
Reuters- March 13, 2019

Liberal Wing of Democrats Wants Changes to NAFTA Replacement
Politico- March 12, 2019

US Working on Plan to Lift Tariffs from Canadian Steel and Aluminum: Trade Chief
Global News- March 12, 2019

Mexico’s Government Says Ratification of USMCA Contingent upon End to Section 232 Aluminum and Steel Tariffs
Aluminum Insider- March 6, 2019
​
USMCA Faces an Uncertain Path through Congress
Marketplace- March 5, 2019

US Auto Chief Courts Auto Union to Support North American Trade Pact
Reuters-March 1, 2019

China Trade War Update: A Trickle of Soybean, Oil Exports
Forbes- February 19, 2019

Senate Finance Chair Says Tariffs on Steel, Aluminum Should Go
​Reuters- January 30, 2019

U.S.-Canada Trade Facts 
​Office of the Unites States Trade Representative

PNWER CEO, Matt Morrison, recently represented PNWER in Washington, D.C. at the ​111th Annual Winter Meeting of the National Governors Association (NGA) as well as in meetings with Congressional leaders and agencies. Key issues to the PNWER region like USMCA, tariffs, and aquatic invasive species were discussed. Keep reading below for an overview of PNWER’s meetings.

​A second key event was a roundtable organized by Governor Steve Bullock of Montana, the 2018-2019 Chair of the NGA, with the Premiers and ten U.S. Governors. This roundtable allowed the Premiers of Canada to speak directly to their U.S. counterparts on the issues of trade and tariffs and dialogue on the impacts to their constituents. 
​
Lastly, the NGA hosted federal leaders from the U.S. and Canada who spoke about the next steps for ratification of USMCA. One key takeaway from this session was the assertion that the Canadian Parliament has only three months left in its 2019 sitting and is unlikely to take up ratification unless                                                                                                                  Section 232 tariffs are lifted. 

​The USMCA and tariff discussion will be a featured issue during the 2019 PNWER Annual Summit in Saskatoon, Saskatchewan, this July 21-25. Hear from policy experts, legislators, and others during keynotes, panels, and sessions that highlight this important cross-border issue.  Join us in Saskatoon in July. More details HERE

Continuing PNWER’s ongoing work on the issue of invasive species, Matt met with PNWER's regional Congressional delegation’s Appropriations committee members to ensure the continued appropriation of federal matching funds to the four Northwest states (ID, MT, OR, and WA) for watercraft inspection stations and monitoring to combat invasive mussels. PNWER has helped to bring $21 million of federal funds to the region since 2015 for invasive mussel prevention in the Columbia River Basin. This year, reauthorization language has expanded to allow for funding in three new river basins and up to a dozen more states. Matt advocated on the behalf of the PNWER region to ensure that the same level of funding would continue for the four Northwest states, and not be diluted by the addition of the new river basins.

For the upcoming year, PNWER submitted requests to each of the House and Senate appropriators in the region for the continued appropriation of $6 million to the four Northwest states. Meetings with Congressional appropriators included staff from the following offices:

• Senator Steve Daines, MT
• Representative Jaime Herrera-Beutler, WA 
• Representative Derek Kilmer, WA
• Senator Patty Murray, WA
• Representative Dan Newhouse, WA
• Representative Mike Simpson, ID

The issue of invasive mussels is a key topic for PNWER's Invasive Species Working Group. The Invasive Species Working Group will be holding a session at the Annual Summit to discuss this and other topics that are vital to the protection of the region's waterways and industry.  ​

PNWER is committed to continuing federal advocacy for the region on these key issues and many more. Currently, PNWER is focusing particularly on the ratification of USMCA and the removal of Section 232 tariffs and retaliatory tariffs. To see PNWER's work on this issue, visit our ​​​NAFTA Modernization/USMCA Ratification page. 

Today marks the opening of the fifth round of negotiations between the U.S. and Canada on the Columbia River Treaty (CRT) since talks to modernize the Columbia River Treaty regime began in May 2018. PNWER has taken a keen interest in the Columbia River Treaty negotiations and is looking forward to seeing the Treaty modernized for the mutual benefit of the region.  In fact, PNWER has been working with partner jurisdictions over several years to underscore the importance of the CRT. In 2004, the PNWER Executive Committee affirmed the Columbia River Treaty as one of the most important issues for the region.  Since then, much has been done in the region to provide input to the U.S. and Canadian entities leading up to the renegotiation of the treaty.  This past year marked a major effort by PNWER to bring stakeholders and experts together to learn more about the treaty, the negotiations, and the impact on the region.
 
This past July, PNWER organized a Symposium which was held at the PNWER Annual Summit in Spokane, WA. This Symposium was the first joint session to include stakeholders from both sides of the border as well as the chief negotiators from the U.S. and Canada. The Symposium provided the chief negotiators the opportunity to present together and hear testimony from stakeholders. Stakeholders shared the benefits and impacts of the Treaty, focusing on areas including ecosystems, tribal groups, utilities, tourism, agriculture, recreation, and more.  The Symposium also featured legislators of jurisdictions that are in and surrounding the Columbia River Basin who spoke about effects of the CRT on livelihoods in the region. 
Watch TVW's coverage of the CRT Symposium HERE. 
 
Following the Symposium, PNWER and its partners organized two policy tours highlighting aspects of the Columbia River Basin to legislators, policymakers, and stakeholders. The first tour to the Grand Coulee Dam in central Washington showcased hydroelectric power and water storage for irrigation projects in the U.S. and Canada.  Participants heard from several experts including a speaker from the Bonneville Power Administration who illustrated the delivery of power throughout the region. The Chelan County Public Utility District Leadership spoke about operations and the important role the Grand Coulee Dam has in power generation. Tour attendees also heard about the importance of water storage for irrigation to the region’s agricultural community.  

The following day, attendees were invited to a two-day study tour of southeast B.C. During the two-day tour, fifty attendees visited the Hugh Keenleyside Dam as well as the Spicer farm in Nakusp, which is one of the farms inundated when the treaty dams were built.  Columbia River Basin residents and local experts were present during the two days to share their knowledge of how the treaty affects the region’s ecosystems, agriculture, tourism, and community.  ​

The U.S. Chief Negotiator for the Columbia River Treaty, Jill Smail, will lead a town hall in Kalispell, Montana on March 20. The town hall will provide an opportunity for the public to hear about the status of the negotiations as well as to ask questions. For more details on the town hall, visit the U.S. Department of State's website. 

For more information on the Columbia River Treaty, its history, and impact, visit the links below.

Government of British Columbia:
https://engage.gov.bc.ca/columbiarivertreaty/
https://engage.gov.bc.ca/columbiarivertreaty/2018-community-meetings/
February 2019 Columbia River Treaty Newsletter 

U.S. Department of State:
https://www.state.gov/p/wha/ci/ca/topics/c78892.htm
https://www.federalregister.gov/documents/2019/02/27/2019-03353/town-hall-meeting-on-modernizing-the-columbia-river-treaty-regime