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The Security and Prosperity Partnership of North America (SPP) is a trilateral initiative that was
launched in March 2005 to increase cooperation and information sharing for the purpose of
increasing and enhancing security and prosperity in the United States, Canada, and Mexico. The
SPP is a government initiative that was endorsed by the leaders of the three countries, but it is not
a signed agreement or treaty and, therefore, contains no legally binding commitments or
obligations. It can, at best, be characterized as an endeavor by the three countries to facilitate
communication and cooperation across several key policy areas of mutual interest. Although the
SPP builds upon the existing trade and economic relationship of the three countries, it is not a
trade agreement and is distinct from the existing North American Free Trade Agreement
(NAFTA). Some key issues for Congress regarding the SPP concern possible implications related
to private sector priorities, national sovereignty, transportation corridors, cargo security, and
border security.
The SPP was initiated on March 23, 2005 when the leaders of the United States, Canada, and
Mexico met in Waco, Texas, to discuss a number of issues including trade and economic
collaboration. A major outcome of the summit was the announcement of the SPP. The initial plan
included the establishment of a number of working groups in both the security and prosperity
components of the initiative. The security working groups are chaired by the Secretary of
Homeland Security and the prosperity working groups are chaired by the Secretary of Commerce.
Since June 2005, the SPP working groups have provided annual reports to the three North
American leaders on their work and key accomplishments. The 2005 report provided the initial
proposals on how to accomplish the goals of the SPP. The priorities focused on increasing
collaborative efforts to improve certain sectors of the economy; developing higher standards of
safety and health; and addressing environmental concerns. At the 2007 North American Leaders’
Summit in Montebello, Canada, the leaders announced the following priorities for the SPP: (1)
Enhancement of the Global Competitiveness of North America, (2) Safe Food and Products, (3)
Sustainable Energy and the Environment, (4) Smart and Secure Borders, and (5) Emergency
Management and Preparedness. In February 2008, ministers from the United States, Canada, and
Mexico met in Baja California, Mexico to review the progress of the working groups during the
previous year and to discuss cooperative approaches for meeting challenges and opportunities in
the five SPP priority areas. In April 2008, the North American leaders held a summit to discuss
how they might further advance the goals of the SPP. The three leaders decided that their
respective ministers should continue to renew and focus their work in the five SPP priority areas.
It is unclear what course of action will be taken regarding the SPP under President Barack
Obama’s Administration.
This report will be updated as events warrant.

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Background ..................................................................................................................................... 1
Working Group Proposals and Priorities ......................................................................................... 1
Prosperity Components of the SPP.................................................................................................. 3
The North American Competitiveness Council (NACC).......................................................... 3
NACC Recommendations......................................................................................................... 3
Security Components of the SPP..................................................................................................... 4
The SPP and Member Economies ................................................................................................... 5
Transportation Corridors ................................................................................................................. 6
Cargo Security and Border Facilitation ........................................................................................... 7

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Author Contact Information ............................................................................................................ 8

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The Security and Prosperity Partnership of North America (SPP) is a trilateral initiative, launched
in March 2005, that is intended to increase cooperation and information sharing in an effort to
increase and enhance prosperity in the United States, Canada, and Mexico. The SPP is a
government initiative that was endorsed by the leaders of the three countries, but it is not a signed
agreement or treaty and, therefore, contains no legally binding commitments or obligations. It
can, at best, be characterized as an endeavor by the three countries to facilitate communication
and cooperation across several key policy areas of mutual interest. Although the SPP builds upon
the existing trade and economic relationship of the three countries, it is not a trade agreement and
is distinct from the existing North American Free Trade Agreement (NAFTA). Some key issues
for Congress regarding the SPP concern possible implications related to private sector priorities,
national sovereignty, transportation corridors, cargo security, and border security. These issues are
discussed in various sections of the report.
The SPP was initiated on March 23, 2005 when the leaders of the United States, Canada, and
Mexico met in Waco, Texas, to discuss a number of issues including trade and economic
collaboration. A major outcome of the summit was the announcement of the SPP. The primary
purpose of the initiative was to improve cooperative efforts among the three countries in areas
related to economic prosperity and the protection of the environment, the food supply, and public
health.1 The initial plan included the establishment of a number of security and prosperity
working groups in each of the two categories. The security working groups are chaired by the
Secretary of Homeland Security and the prosperity working groups are chaired by the Secretary
of Commerce. It is unclear what course of action will be taken regarding the SPP initiative under
President Barack Obama’s Administration.
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Since June 2005, the SPP working groups have provided annual reports to the three leaders of
North America on the work and key accomplishments of the working groups. The 2005 report
provided the initial proposals on how to accomplish the goals of the SPP. The priorities focused
on increasing collaborative efforts to improve certain sectors of the economy; developing higher
standards of safety and health; and addressing environmental concerns. The proposals related to
trade and commerce included a signed Framework of Common Principles for Electronic
Commerce; liberalization of Rules of Origin; a Memorandum of Understanding between Canada
and the United States to exchange information and cooperate on activities relating to consumer
product safety and health; harmonization of the use of care symbols on textiles and apparel
labeling; and a document clarifying each country’s domestic procedures for temporary work entry
of professionals under NAFTA.2 In March 2006, the three countries met again and continued to
advance the agenda of the SPP by focusing on these high-priority initiatives.
In August 2007, at the North American Leaders’ Summit in Montebello, Canada, the leaders of
the three countries issued a joint statement outlining the progress that the SPP working groups
had made and the priorities for the coming year. Accomplishments of the working groups

1 See Security and Prosperity Partnership of North America (SPP) website http://www.spp.gov/.
2 Security and Prosperity Partnership of North America (SPP), Report to Leaders, June 2005.
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included (1) a North American Plan for Avian and Pandemic Influenza, (2) a Regulatory
Cooperation Framework, (3) an Intellectual Property Action Strategy, and (4) a Trilateral
Agreement for Cooperation in Energy Science and Technology. In addition, the North American
leaders agreed upon the following five priority areas for the SPP working groups: (1)
Enhancement of the Global Competitiveness of North America, (2) Safe Food and Products, (3)
Sustainable Energy and the Environment, (4) Smart and Secure Borders, and (5) Emergency
Management and Preparedness.3
In February 2008, ministers from the United States, Canada, and Mexico met in Baja California,
Mexico to review the progress of the working groups during the previous year and to discuss
cooperative approaches for meeting challenges and opportunities in the five SPP priority areas. 4
The ministers provided progress reports to former President Bush, President Calderon of Mexico,
and Prime Minister Harper of Canada. At the North American Leaders Summit in April 2008, the
three leaders of North America directed their ministers to renew and focus the work of the SPP in
the following areas:
• Competitiveness: Work to make regulations more compatible among the three
countries to support integrated supply chains and reduce the cost of goods traded
within North America, particularly within the auto industry. Strengthen
intellectual property rights protection by advancing the Intellectual Property
Action Strategy.
• Smarter and More Secure Borders: Coordinate long-term infrastructure plans
and take steps to reduce bottlenecks and congestion at major border crossings.
Increase cooperation on the development and application of technology to make
borders smarter and more secure so as to avoid unnecessary inspections and to
strengthen trusted traveler and shipper programs. Increase cooperation to install
advanced screening equipment at ports of entry to deter and detect smuggling of
nuclear and radiological materials.
• Energy Security and Environmental Protection: Strengthen energy security
and protect the environment by developing a framework for harmonization of
energy efficiency standards and sharing technical information to improve the
North American energy market. Exchange information and explore opportunities
to further reduce barriers to expanding clean energy technologies. Work to
improve North America’s air quality and improve the safety of chemicals in the
marketplace.
• Food and Product Safety: Increase cooperation and information sharing on the
safety of food and products. Strengthen regulatory and inspection systems to
protect consumers. Work to make food and product safety standards more
compatible.
• Emergency Response: Work on updating existing bilateral agreements to enable
government authorities to help each other quickly and efficiently during times of

3 Joint statement from Prime Minister Harper, President Bush, and President Calderón at the North American Leaders’
Summit, Montebello, Quebec, Canada, August 21, 2007. (hereinafter Joint statement, 2007).
4 U.S. Department of Commerce, Office of the Secretary, Commerce News, “Joint Statement by Ministers Responsible
for the Security and Prosperity Partnership of North America,” February 28, 2008.
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crisis and great need, including responding to threats posed by cyber or chemical-
biological attacks.5
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The prosperity components of the SPP are aimed at increasing cooperation and sharing of
information to improve productivity, reduce the costs of trade, and enhance the quality of life. In
the initial phase of the SPP, the three countries agreed to establish a series of working groups to
“consult with stakeholders; set specific, measurable, and achievable goals and implementation
dates; and identify concrete steps the governments can take to achieve these goals.” The
prosperity working groups were established to cover a broad range of issue areas. In August 2007,
the North American leaders announced a need for enhancing North American competitiveness
through compatible regulations and standards that would help the three countries protect health,
safety, and the environment, as well as to facilitate trade in goods and services across their
borders. They also stated the importance of making more progress on regulatory cooperation and
the protection of intellectual property. In addition, they highlighted the need for increased
cooperation on import-safety issues, energy and science technology, and energy efficiency
standards in key products and standby power consumption.
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At the March 2006 summit of the North American leaders, the three leaders agreed that greater
private sector engagement would help the governments of the United States, Canada, and Mexico
in their efforts to enhance North American competitiveness through the SPP. As a result, the
North American Competitiveness Council (NACC) was created as an official working group
under the SPP. The NACC consists of private sector representatives from North American
corporations and provides contributions and advice related to the prosperity component of the
SPP. In 2008, the North American ministers responsible for the SPP met with the NACC to
discuss long-term challenges facing the three countries and how best to increase security and
prosperity in North America to help make the region a desirable place to live, work, and do
business. In its 2008 report to leaders, the NACC identified priorities and other key issues to help
further the prosperity components of the SPP.6
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The NACC report listed the following priorities to enhance North American competitiveness:
• Facilitating entry for cargo and reducing border congestion along the borders
with Canada and Mexico;
• Establishing competitive supply chains across North America by developing
efficient transportation networks, especially along the northern and southern
borders of the United States;

5 The White House, Office of the Press Secretary, Joint Statement by President Bush, President Calderon, Prime
Minister Harper, April 22, 2008.
6 North American Competitiveness Council (NACC), Meeting the Global Challenge: Private Sector Priorities for the
Security and Prosperity Partnership of North America, 2008 Report to Leaders, April 2008.
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• Working towards comprehensive integration of the North American automotive
industry through more efficient border inspections and greater regulatory
cooperation by aligning vehicle safety standards and regulations among the three
countries;
• Implementing a trilateral Intellectual Property Action Strategy for more rigorous
protection of intellectual property rights;
• Enhancing secure alternatives to a passport before the June 2009 date for full
implementation of the Western Hemisphere Travel Initiative;
• Strengthening trilateral communication and cooperation to prevent the entry of
unsafe food and products into North America and working to make regulatory
and inspection regimes for food and product safety more compatible;
• Encouraging development of sustainable energy technologies and protection of
the environment through private sector cooperation;
• Ensuring emergency management planning through increased cooperation on
emergency protocols, particularly those related to border traffic and prioritization
of cross-border shipments during emergencies; and
• Enhancing cooperation in financial regulation in order to provide more efficient
access to capital, to improve the availability and affordability of insurance
coverage for cross-border carriers, and to find new ways for cross-border
collaboration on investment.7
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The goal of the security components of the SPP is to coordinate the security efforts undertaken by
each of the three participating nations to better protect citizens from terrorist threats and
transnational crime while promoting the safe and efficient movement of legitimate people and
goods. Working groups were established to address the security aspects of the SPP and are
grouped by three broad themes: (1) external threats to North America, (2) streamlined and
secured shared borders, and (3) prevention and response within North America. Ten individual
security working groups have been established to address specific portions of the security agenda
and include traveler security; cargo security; border facilitation; aviation security; maritime
security; law enforcement; intelligence cooperation; bio-protection; protection, preparedness, and
response; and science and technology.8 In the August 2007 joint statement, the three leaders
highlighted several next steps to better secure North America, including, for example, reducing
duplicate screening for baggage and cargo, pursuing innovative and interoperable law
enforcement models to promote seamless operation at the border, improving and expanding
existing law enforcement radio communications, identifying ways to further enhance the benefits
of trusted traveler programs, and alleviating bottlenecks as the U.S.-Mexico border.9 The
Ministerial Joint Statement issued in February of 2008, in advance of the leaders’ meeting in New
Orleans in April of 2008, stated that the leaders had reviewed the progress that had been achieved

7 NACC, pp. 5-10.
8 Government of Canada, “Security and Prosperity Partnership of North America: Working Groups,” at
http://www.psp-spp.gc.ca/overview/working_groups-en.aspx.
9Joint statement, 2007.
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since the meeting in Montebello, and directed officials to “strengthen cooperation protocols and
create new mechanisms to secure our common borders while facilitating legitimate travel and
trade in the North American region.”10
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The SPP is not a trade agreement, nor a form of economic integration, and goes only as far as
leading to some measure of regulatory harmonization among the United States, Canada, and
Mexico. The SPP working groups are not contemplating further market integration in North
America. Such a move would require a government approval process within each of the three
countries. In the United States, such an agreement would require the approval of the U.S.
Congress.
Some proponents of economic integration in North America have maintained that the emergence
of China and India in the global marketplace may be putting North America at a competitive
disadvantage with other countries and that NAFTA should go beyond a free trade agreement.
Some observers have written policy papers proposing that the U.S. government consider the
possibility of forming a “NAFTA-Plus,” a “North American Union,” or even a common currency
called the “Amero.”11 Critics of this level of economic integration believe that NAFTA has
already gone too far and that it has harmed the U.S. economy and undermined democratic control
of domestic policy-making.12 Others suggest that the SPP may be more than an initiative to
increase cooperation and that it could lead to the creation of a common market or economic union
in North America.13 However, as previously noted, if the United States were to potentially
consider the formation of a customs union or common market with its North American neighbors,
it would require approval by the U.S. Congress.
A free trade agreement (FTA), such as NAFTA, is the most common form of regional economic
integration. Generally, in an FTA, member countries agree to eliminate tariffs and nontariff
barriers on trade and investment within the specified free trade area. Under an FTA, each country
maintains its own trade policies, including tariffs on trade outside the region.
In addition to FTAs, other forms of economic integration are customs unions, common markets,
and economic unions. Such agreements sometimes imply a greater loss of autonomy over the
parties’ commercial policies and require longer and more complex negotiations and
implementation periods than FTAs. Customs unions are agreements in which members conduct
free trade among themselves and maintain a common trade policy towards non-members. These
agreements require the establishment of a common external tariff and harmonization of external
trade policies. Common markets are those in which member countries go beyond a customs union
by eliminating barriers to labor and capital flows across national borders within the market. The

10 Department of Commerce, Commerce News: Joint Statement by Ministers Responsible for the Security and
Prosperity Partnership of North America, Washington, DC, February 28, 2008,
http://www.spp.gov/news/news_02282008.asp.
11 U.S. Council of the Mexico-U.S. Business Committee, Council of the Americas, A Compact for North American
Competitiveness, April 2005; Grubel, Herbert G., The Fraser Institute, The Case for the Amero: The Economics and
Politics of a North American Monetary Union, September 1999.
12Public Citizen, Global Trade Watch, North American Free Trade Agreement, see http://www.citizen.org.
13 Corsi, Jerome R., The Plan to Replace the Dollar with the ‘Amero’, May 22, 2006.
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European Union is the most prominent example of a common market. In economic unions,
member countries merge their economies even further than common markets by establishing a
common currency, and therefore a unified monetary policy, along with other common economic
institutions. The 12 members of the European Union that have adopted the euro as a common
currency is the most significant example of a group of countries that has moved forward from a
customs union to an economic union.
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One of the stated goals of the SPP is to improve the safety, security, and efficiency of the flow
goods between the three countries. The majority of trade between the United States, Canada and
Mexico is transported by land modes (truck, rail, and pipeline). U.S. freight trade with Canada
and Mexico more than doubled in value between 1996 and 2007, growing from $419 billion in
199614 to $909 billion in 200715. Trucks are the dominant mode for transporting goods between
the United States and its NAFTA partners, accounting for 61% ($555 billion) of the value of total
trade in 2007.16 This growth in the volume of freight is placing an increasing burden on
transportation systems, and particularly the road network.
Recent data however, has shown a decline in the volume of surface transportation trade between
the United States and its NAFTA partners. For example, the Bureau of Transportation Statistics
(BTS) reports that the value of trade using surface transportation between the United States and
Canada for November 2008 was $37.8 billion, which represents a 16.4% decline compared to
November of 2007. Similarly, BTS reports that U.S.-Mexico surface transportation trade for
November 2008 totaled $22.9 billion, representing a decline of 9% compared to November 2007.
These measures combined indicate that surface transportation trade for November 2008 between
the United States and its NAFTA partners has declined 13.8% as compared to November 2007.17
It remains to be seen what impact these declines, particularly if they are sustained over the
coming months, will have on transportation planning and construction.
Some observers contend that the SPP may ultimately lead to a so-called “NAFTA Superhighway”
that would link the United States, Canada, and Mexico with a ‘super-corridor’.18 The federal
government however, has stated that there are no plans to build a “NAFTA Superhighway,” and
that no super-corridor initiative of any sort is a part of the SPP.19 Further, no legal authority exists

14 Bureau of Transportation Statistics, Increased Trade Spurs Growth in North American Freight Transportation, May,
2007, at http://www.bts.gov/publications/bts_special_report/2007_05/pdf/entire.pdf.
15 Office of Public Affairs, “U.S. Frieght Shipments with Canada and Mexico Reached Record High in 2007”,
Department of Transportation, BTS-56-08, Washington, DC, November 19, 2008, pp. 1-3,
http://www.bts.gov/press_releases/2008/bts056_08/pdf/bts056_08.pdf.
16 Ibid., p. 1.
17 Bureau of Transportation Statistics, “November 2008 Surface Trade with Canada and Mexico Fell 13.8% from
November 2007”, Department of Transportation, Press Release, Washington, DC, January 29, 2009,
http://www.bts.gov/press_releases/2009/bts006_09/html/bts006_09.html.
18See for example, Corsi, Jerome, I-69: Yet Another NAFTA Superhighway, at http://www.humanevents.com/
article.php?id=16966; or Schlafly, Phyllis, The NAFTA Superhighway, August 23, 2006, at http://www.eagleforum.org/
column/2006/aug06/06-08-23.html; or for a rebuttal of some of these claims see for example, Dine, Philip,
“Superhighway myth feeds on fear,” St. Louis Post-Dispatch, May 19, 2007.
19 Security and Prosperity Partnership of North America, Myths vs. Facts, at http://www.spp.gov/myths_vs_facts.asp.
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and no funds have been appropriated to construct such a superhighway, nor are there current plans
to seek such authority or funding.20
States regularly undertake highway construction and improvement projects independently of the
SPP. As noted above, the nation’s freight transportation system is being exposed to an increasing
burden from cross-border trade.21 States and localities undertake highway projects to address the
impacts of this increasing burden on the roadways, particularly in border states. Planning for
these projects along the border often requires consultation with the neighboring NAFTA partner,
as expansions of port access roads, additional lanes and bigger plazas, impact the flow of traffic
through the port, and therefore the flow of traffic entering the neighboring country. Among other
efforts, the SPP Transportation Working Group is analyzing border trade and traffic flows to
support border infrastructure planning and prioritization.
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One of the central tensions in border management policy concerns how to design policies that
facilitate the efficient entry of legitimate cargo while simultaneously ensuring that a sufficient
level of security and scrutiny is applied to deny the entry of illegitimate cargo. Two of the ten SPP
security working groups are devoted to cargo security and border facilitation. Since 9/11, the U.S.
government has undertaken a number of initiatives aimed at improving cargo security and the
facilitation of legitimate or low-risk cargo. Programs such as the Free and Secure Trade (FAST)
program (a joint U.S.-Canada, and U.S.-Mexico program), and the Customs-Trade Partnership
Against Terrorism (C-TPAT) program (a public-private supply chain security initiative) are two
well-known examples of post-9/11 initiatives that seek to provide increased security while also
providing expedited customs-clearance to pre-vetted shipments.
One initiative being considered under the SPP is known as pre-clearance, which has long been in
place at airports, but which has remained difficult to implement at the land border. A related
concept is known as reverse inspections which is essentially pre-clearance conducted on both
sides of the border. Under the reverse inspection scenario, U.S. customs officials would be
stationed in Canada to process and clear cargo en-route to the U.S. before the cargo reaches the
U.S. border. Similarly, Canadian customs officials would be stationed in the U.S. to process cargo
en-route to Canada from the United States. Proponents of reverse inspections maintain that this
process offers increased security because it would allow, for example, U.S. customs officers the
opportunity to intercept high-risk cargo before the truck reaches the bridge or the booth at the on
the U.S. side of the border. Critics of the reverse inspection proposal cite sovereignty issues as a
primary obstacle, but there are a host of other issues including the different authorities held by
each country’s customs agencies, and a variety of different legal issues.22

20 Ibid.
21 See, Bureau of Transportation Statistics, Increased Trade Spurs Growth in North American Freight Transportation,
May, 2007, at http://www.bts.gov/publications/bts_special_report/2007_05/pdf/entire.pdf.
22 See, Tower, Courtney. “Pre-clearance scrapped after U.S. breaks off Canada talks,” Journal of Commerce Online,
April 27, 2007, citing the concerns of the Department of Homeland Security regarding the restrictions Canadian law
would have placed on U.S. searches, investigations, and fingerprinting. See also, Nakashima, Ellen. “Fingerprint
Dispute Dooms Border Site,” Washington Post, May 24, 2007.
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Progress was made, under the U.S.-Canada Shared Border Accord and the SPP, towards
developing a pilot program to test reverse inspections at two different land border ports along the
U.S.-Canada border.23 To date however, the pilots have not gone forward24, and it is unclear
whether or not the obstacles to reverse inspections can be overcome in the future.

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M. Angeles Villarreal
Jennifer E. Lake
Specialist in International Trade and Finance
Analyst in Domestic Security
avillarreal@crs.loc.gov, 7-0321
jlake@crs.loc.gov, 7-0620

23 U.S. Department of Homeland Security. “Security and Prosperity Partnership: Implementation Report-Security
Agenda,” Fact Sheet, June 27, 2005, at http://www.spp.gov/SECURITY_FACT_SHEET.pdf?dName=fact_sheets.
24 Tower, Courtney. “Pre-clearance scrapped after U.S. breaks off Canada talks,” Journal of Commerce Online, April
27, 2007.
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