Given current economic trends, the time may be ripe to consider as a concept, an economic region straddling the middle of the North American continent – a North American Central Economic Region (NACER). These cross-border economic regions spanning Northwestern Ontario, Manitoba, North and South Dakota and Minnesota, already share infrastructure, production facilities and research and development capacity. A North American Central Economic Region (NACER) would build on these existing relationships, as well as historic patterns of cultural exchange, cross-border trade, and travel.
Governments with fixed territorial boundaries do not always effectively address the need for cross-border regional economic partnerships and co-operation. Often created under radically different conditions, borders can result in transactions costs that limit interaction and opportunity.
The concept of cross-border regions in North America is not new. Joel Garreau’s Nine Nations of North America describes cross-border regions that share similar economic, social and cultural characteristics. Other concepts for cross-border economic regions include Cascadia on the west coast and Atlantica on the east coast. Atlantica is more formally known as the Atlantic International Northeast Economic Region (AINER) and is currently the focus of advocacy and research on the part of the Atlantic Institute for Market Studies based in Halifax and the Eastern Maine Advocacy Corporation. The AINER concept comprises the Canadian Atlantic provinces as well as Maine, Vermont and the northern part of New York State bordering Lake Ontario.
Cascadia has been nurtured by a government funded cross-border advocacy group initiative known as the Pacific Northwest Economic Region or PNWER. PNWER defines a region of the Pacific Northwest that includes British Columbia, Alberta, the Yukon, Alaska, Idaho, Montana, Oregon and Washington with a total population of about 20 million people. The PNWER provides a forum to address important cross-border issues in trade, transportation, the environment and energy. The 18th annual summit of the PNWER was held in Vancouver in July 2008 and discussions focused on marketing the Pacific Northwest in advance of the Vancouver Olympics, trade and travel across the Canada-U.S. border.
In a similar manner, a North American Central Economic Region (NACER) could span Northwestern Ontario, Manitoba, North and South Dakota and Minnesota. This region stands at the cross-roads of the North American continent and essentially comprises the north-central portion of Garreau’s “Breadbasket Nation.” As a region, NACER covers 1.8 million square kilometers with a population of nearly 8 million people and a GDP (US$) of about 370 billion dollars. This economic region contains agricultural production activities, food processing, forestry, petroleum, coal, mineral and hydroelectric resources as well as substantial manufacturing and service capacity.
The recent rise in commodity, food and energy prices has demonstrated the increasing strategic importance of the NACER zone in the long run. As well, the major centers of Minneapolis-St. Paul and Winnipeg are already locations for numerous corporate head offices, health, educational, research and government services. In addition, NACER contains vital road, rail and airport hubs that would be complemented by three ocean-going ports – Churchill, Duluth and Thunder Bay as well as the Mississippi route down to the Gulf of Mexico.
The similarities and geographic proximity of the provincial and state economies of this region create a conjunction of common interests and possibilities for economic growth. For example, Manitoba and Northwestern Ontario have abundant hydroelectric resources and would benefit from increased exports to meet growing American power needs. Given current trends in energy prices, NACER has the potential to be a 21st century energy export giant rooted in agricultural and forest bio-fuels and hydro-electricity. In particular, the potential of Northwestern Ontario as a forest bio-refining energy center and hydro-electric producer would be enhanced by sharing of expertise with Manitoba and Minnesota.
Another specific example of economic interests coinciding can be seen in the conjunction between the aerospace program at the University of North Dakota and Winnipeg’s aerospace manufacturing sectors. As well, Manitoba and Minnesota both provide large adjacent markets for goods and services for firms in North and South Dakota.
As a further example of common economic interests, Minnesota has robust growth and a tight labor market and some of its firms could benefit from setting up operations in nearby Northwestern Ontario which suffer a surplus of highly skilled surplus labor and capacity due to the forest sector downturn. Moreover, recent economic development initiatives announced for northeastern Minnesota could also provide opportunities for Northwestern Ontario firms. As well, improvements to the highway, road and border-crossing network in the NACER region could also generate benefits for increased regional partnerships.
This economic region requires a sense of common vision in order to grow and prosper during the 21st century. Leaders in this region need to facilitate cross-border commerce and activity in the areas of cross-border employment and business opportunities, better relationships between producers and suppliers, improving cross-border transportation infrastructure, cross-border environmental and nature conservation, and tourism promotion. At the very least, a regular regional forum between Chambers of Commerce and political leaders to examine common economic problems and solutions would be a worthwhile endeavor.
Institutionalizing a regular set of meetings as has been done in the Pacific Northwest would be a good start. Furthermore, developing a regional vision and set of common statistics that could be used to lobby both federal governments could also help, particularly when border issues threaten the role of the border as a zone of interaction.
The time is indeed ripe for a North American Central Economic Region (NACER). This cross-border region shares common economic interests and is strategically positioned at the heart of the North American continent. Key immediate priorities for this region involve research and industrial partnerships, common tourism marketing and steps to reduce congestion and streamline flows of legitimate trade and travel. The next step is for interested parties and stakeholders to come together and establish a cross-border institutional framework to promote this alliance, identify issues, set priorities and most importantly, mobilize resources on both sides of the border.
Livio Di Matteo is Professor of Economics at Lakehead University in Thunder Bay and specializes in economic history, public policy and health economics.