Maine, New Brunswick businesses look to maintain good relations despite difficult trade climate

File photo / Peter Van Allen A welcome sign in Aroostook County.

Write a Comment

As the federal government’s trade war ramps up, two trading partners on opposite sides of the Maine/Canada border decided the best approach was to split the additional cost of tariffs on their respective imports.

Provided photo

Deb Neuman, Bangor Chamber of Commerce

“They’re splitting the additional costs" related to the tariffs, said Deb Neuman, president of the Bangor Region Chamber of Commerce, who was speaking about a nursery business that’s a member of the chamber and a business in Canada where the nursery sources much of its stock.

She continued, “And the nursery here is trying hard not to pass that additional cost on to their customers, recognizing that a lot of consumers are pulling back on expenses right now.”

Neuman spoke Tuesday at a virtual town hall on “Trade Relationships, Tourism and the Impact of Uncertainty,” presented by the Fredericton Chamber of Commerce, Saint John Region Chamber of Commerce, Chamber of Commerce for Greater Moncton and the Bangor Region Chamber of Commerce to discuss tariffs and other policy decisions affecting cross-border relationships, businesses and economies.

Interdependence

The forum drew about 300 attendees.

The number of attendees spoke to the interdependence of the two countries, said Luke Randall, minister of the Government of New Brunswick.

“We’re customers of each other, we’re connected and we have been for centuries,” Randall said. “These relationships are vital to the prosperity of both Canada and the U.S.”

Randall said conversations are vital to maintaining relations in the face of challenges, especially those affecting cross-border travel and businesses.

“We’re here, we’re open for business,” he said. “Come on over this summer…we’re friends.”

Canada is Maine’s largest trading partner by a large margin, said Traci Simmons, CEO of Opportunities New Brunswick.

“We have a shared, strong economic relationship through cross-border trade,” Simmons said.

Simmons presented the following data related to the Maine/New Brunswick trade link:

Maine exports more to New Brunswick than to any other single country.
Maine ranks No. 3 among U.S. states for exports to New Brunswick.
Maine exports $790 million in goods annually to New Brunswick.
Maine imports $3.4 billion in gods annually from New Brunswick.
Maine ranks No. 2 among U.S. states for imports from New Brunswick.
94 Canadian-owned companies employ 5,350 workers in Maine.
Maine’s top export to New Brunswick is fish and crustaceans, followed by natural gas and other gases.
New Brunswick’s top export to Maine is fuel oil followed by electricity.
Four categories of forestry products rank in the top eight for each.

“There’s a lot of interconnectivity between our two regions,” Simmons said.

Travel decline

On the tourism front, Simmons said, data are showing that passengers and travelers across land borders have dropped to pandemic levels in both Maine and New Brunswick.

“That is concerning,” she said. “It will be uncertain times and there will be impacts.”

The New Brunswick government is taking steps to prop up supports for tourism businesses there in case they feel effects from decreased travel, she added.

The trade relationship between Canada and and the U.S. is beneficial to both nations, she said.

“When you you get past the social media chatter, you find professionals on both sides of the border who want to maintain good relationships,” she said.

She added, “At the end of the day, we all want what’s best for our respective private sectors … Communication is a very important part of finding that path forward.”

It should also be noted that, in addition to tense trade relations, another factor with tourism numbers is the exchange rate — which for now favors U.S. travelers, not Canadians. Today, the Canadian dollar is worth 71 U.S. cents, and has traded as low as 56 cents in recent months.

Main Street

File photo / Jim Neuger

Wade Merritt, president of the Maine International Trade Center

Wade Merritt, president and CEO of the Maine International Trade Center, characterized the relationship as much deeper than international trade.

“I’ve always been hesitant to say we’re doing international trade with Canada,” said Merritt. “It’s technically that, yes. But given the level of integration between our two economies” — with shared natural resources, energy, tourism and cultural heritage — “it’s a relationship that goes much further down into our psyches, our DNAs, than, say, taking companies to a different part of the world. That’s something that makes conversations like this necessary.”

Beyond chambers of commerce and international trade companies, it’s important for Main Street business on both side of the border to have their voices heard, said Merritt.

Merritt said he took part in a mission, planned a year ago, to Washington, D.C., last week, meeting with counterparts from over two dozen other states and with congressional delegations, federal agencies, and think tanks on international trade.

Participants dug into the issues with a goal to be able to counsel companies on how to navigate an uncertain international trade environment, he said.

“Please reach out to us and the congressional delegation to let them know how this is affecting you,” he said.

Pile-on

Simmons said there’s a pile-on effect of U.S. tariffs and retaliatory tariffs among sectors that trade goods multiple times across borders.

The forestry sector, for example, is highly integrated between Maine and New Brunswick, she said.

“Businesses on both sides of the border are trying to navigate those impacts,” she said.

Simmons noted there are opportunities for New Brunswick companies that have become reliant on U.S. relationships, such as investing in productivity measures to improve their competitive position as well as look to grow into new markets.

“We’re overweighted to the U.S. relationship and I think this is a bit of a wakeup call to New Brunswick companies,” she said.

Merritt noted that the trade war doesn’t shut down trade.

“It’s not true that were not going to be able to do trade anymore,” he said. “It’s that things will cost more. Businesses will feel that. There will be different strategies for how to manage that. Some of that can be managed through investments in workforce training and productivity.”

He added, “That needs to happen regardless. And that is, in the end, not a bad thing.”