Global Models of Binational Regional Collaboration

Global Models of
Binational Regional Collaboration:
The Potential for Great Lakes Regional Innovation
J. D. Snyder
Project Director
Kelly Christopherson│Leslie Grimm
Anthony Orlando │ Aaron Galer
May 2014

Global Models of Binational Regional Collaboration May 2014
Michigan State University
Center for Community and Economic Development
in cooperation with the
St. Clair County Economic Development Alliance
Eastern Upper Peninsula Regional Planning and Development Commission
Chippewa, Luce, Mackinac Counties
and the East Michigan Council of Governments (EMCOG)
Arenac, Bay, Clare, Gladwin, Gratiot, Huron, Iosco, Isabella, Midland, Ogemaw,
Roscommon, Saginaw, Sanilac, Tuscola Counties
Disclaimer
This report was prepared by the Michigan State University Center for Community and Economic Development, in part, under
award 06-79-05665 from the Economic Development Administration, U.S. Department of Commerce and, in part, with the
support of a grant from the Michigan Applied Public Policy Research, a program of the Michigan State University Institute for
Public Policy and Social Research (IPPSR). The statements, findings, conclusions, and recommendations are those of the
authors and do not necessarily reflect the views of the U.S. Economic Development Administration, the U.S. Department of
Commerce, or the MSU Institute for Public Policy and Social Research.
©2014 Michigan State University Board of Trustees, All Rights Reserved
Cover Photo Credits: Gov. Snyder/PM Harper- http://www.cbc.ca/news/iikime/iikimed/1b-windsor-detroit-bridge-deal-struck-1.1141713,
Trucks-http://blog.cleveland.com/business/2008/07/bottleneck_at_the_border_aging.html, Blue Water Bridge -
http://commons.wikimedia.org/wiki/File:Blue_Water_Bridge_2006.JPG, Niagara Bridge -
http://warrior481.blogspot.com/2009_07_01_archive.html, NITC - http://www.popularmechanics.com/technology/engineering/rebuilding-
america/the-monumental-new-us-to-canada-bridge#slide-8, Arranged by Anthony Orlando.

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Table of Contents
1.0 Introduction.........................................................................................................................................1
1.1 The Levels and Value of Binational Collaboration.....................................................................2
1.11 Traditional or Classic Binational Collaboration .........................................................................3
1.111 U.S.-Canada Binational Collaboration .......................................................................................3
1.12 Binational State-Provincial Collaboration: Practicing Paradiplomacy.......................................5
1.121 Binational Multi-State/Multi-Provincial Collaboration .............................................................6
1.13 Binational Regional Sub-State/Sub-Provincial Collaboration....................................................7
1.131 The Role of Economic Development Districts in Binational Regional Collaboration ................8
2.0 Theories of Binational Regionalism and Beyond: A Brief Review of the Literature..........................11
3.0 The Importance of Binational Regional Collaboration at the Sub-State/Sub-Provincial Level in the
Global Economy ................................................................................................................................15
3.1 Operationalizing Binational Regional Collaboration ...............................................................16
3.2 Stages of Regional Innovation Systems...................................................................................19
4.0 European Models of Binational Regional Collaboration: Integration and Cohesion ........................21
4.1 EUREGIO (Netherlands-Germany): Pioneering Binational Regional Collaboration ................23
4.2 Oresund Region (Copenhagen, Denmark-Malmo, Sweden): A Binational Metro Region ......25
4.3 Helsinki-Tallinn (Finland-Estonia): The Binational Gulf of Finland Region..............................27
4.4 Hedmark-Dalarna (Norway-Sweden): A Binational Rural EuroRegion....................................29
4.5 The Bothnian Arc (Finland-Sweden): Deepening Northern EuroRegion Integration..............31
4.6 Ireland-Northern Ireland (UK) Collaboration: The Binational Emerald Connection ...............33
5.0 North American Models of Binational Regional Collaboration.........................................................37
5.1 The Pacific Northwest: The Cascadia Bioregion and Mind Set................................................39
5.11 Geographic Area......................................................................................................................40
5.12 Background..............................................................................................................................41
5.13 Current Binational Collaboration Initiatives............................................................................42
5.14 The PNWER Model ..................................................................................................................43
5.2 The Blue Water Region of Southwest Ontario/East Michigan................................................44
5.21 Infrastructure Connections: The Blue Water Bridge and St. Clair River Rail Tunnel...............45

ii
5.22 Demographic and Economic Profile of the Blue Water Region ..............................................46
5.23 The Binational Blue Water Regional Collaborative Process....................................................47
5.24 Success of the Binational Blue Water Regional Collaboration Conference, October 2013 ....48
5.25 Future Steps in the Blue Water Region Binational Collaboration...........................................50
5.3 The Twin Saults Region of the Michigan Eastern Upper Peninsula and Northern Ontario ....50
5.31 The History and Context of the Twin Saults............................................................................51
5.32 Major Economic Sectors in the Twin Saults Region ................................................................52
5.33 Formalizing the Connection: The Sister City: Two Nations – One City Agreement.................52
5.34 The Binational Regional Collaborative Process in the Twin Saults Region..............................53
5.35 Two Successful Binational Regional Collaboration Conferences in the Twin Saults Region...53
5.36 Future Collaborative Steps in the Twin Saults Region.............................................................54
5.4 The Buffalo-Niagara/Southern Ontario Region.......................................................................54
5.5 The Cali Baja Region: San Diego, California, USA/Tijuana, Baja California, Mexico................56
5.6 The Region of El Camino Real: El Paso, Texas, USA/Ciudad Juarez, Chihuahua, Mexico........58
5.7 The Region of Brownsville, Texas, USA/Matamoros, Tamaulipas, Mexico.............................59
6.0 Conclusion .........................................................................................................................................61
6.1 Creating a Binational Regional Collaborative Process.............................................................61
6.2 Economic Rationales Support Binational Regional Collaboration...........................................62
6.3 The Linkage to Regional Innovation Systems..........................................................................62

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1.0 Introduction
A current paradox of globalization is the corresponding rise in the importance of regions at the sub-
state/sub-provincial level. Less surprising, perhaps, is the emerging importance of binational, or cross-
border, regions at the sub-state/sub-provincial level. Current processes of globalization entail a
transition from the traditional international order of sovereign nation-states that arose in the
seventeenth century to a transnational world where a sense of “transcending borders” permeates, or
perforates, traditional national states with the invisible power of the Internet and mushrooming trade
relationships.
In the early 21st century, traditional notions of nation-
state sovereignty are being challenged and transformed
by sub-national and sub-state/sub-provincial regions and
the exponential increase in international trade since 1990.
With trade relationships facilitated by the World Trade
Organization (WTO) and free trade agreements, global
economic growth has occurred at a remarkable pace. In
the past 20 years, global trade has increased annually an
average of 5.4 percent. In global merchandise alone,
trade increased more than 7 percent per year on average
between 1980 and 2011, reaching a total of $18 trillion for that period.1
The commencement of the World Trade Organization (WTO) in 1995 and the implementation of nearly
100 free trade agreements2
world-wide have resulted in a globalized economy that provides access to a
greater variety of goods and services, increase of sales and market shares, improvement in allocation of
global resources, open markets, offering businesses incentives and protections and removing barriers
for a more transparent border. The WTO and the success of current free trade agreements continue to
provide a framework for negotiating and formalizing new trade alliances, and promote innovation,
competition, and economic growth.
Due to the “increasing volume, velocity and importance of flows with and across borders of people,
ideas, greenhouse gases, dollar drugs, good, services, viruses, emails, and weapons,”3
actors at sub-
national levels have become increasingly important. Cities and regions are competing with each other in
the global economy more so than national states. Many regions are not within a single national state,
but are instead located at international borders and transcend national territorial boundaries.
1
World Trade Organization. “World Trade Report: Factors shaping the future of world trade.” 2013. Retrieved December 30,
2013 from http://www.wto.org/english/res_e/booksp_e/world_trade_report13_e.pdf
2
World Trade Organization. Annual Report. Retrieved December 30, 2013 from
http://www.wto.org/english/res_e/booksp_e/anrep_e/anrep13_e.pdf
3
Richard N. Haass. “Sovereignty and Globalisation.” Council on Foreign Relations. 2006. Retrieved December 30, 2013 from
http://www.cfr.org/sovereignty/sovereignty-globalisation/p9903.
In the early 21st century, traditional
notions of nation-state sovereignty
are being challenged and transformed
by sub-national and sub-state/sub-
provincial regions and the exponential
increase in international trade since
1990.

2
Innovation-driven economic growth and prosperity increasingly depend on sub-national actors, those at
the state/provincial and sub-state/sub-provincial levels, emphasizing the importance of working with
cross-border neighbors. Sub-national/sub-provincial actors have the strongest interest in cross-border
relationships because they most directly experience the costs and the benefits.
Due to the evolving roles of national and sub-national regions, there is a need for policies to fit and
define these functional binational regions, or cross-border regions. Cross-border regions are increasingly
more visible to national policymakers and have become more globally-competitive for firms and talent.
Moreover, binational regional collaboration is ideal for facilitating innovation policy because regions
include a relevant spectrum of private firms, universities, talent/workers, and other resources.
In the following sub-sections of the introduction, the three levels of binational collaboration are briefly
described: traditional binational collaboration between nation-states; state/provincial collaboration and
multi-state/multi-provincial collaboration; and regional sub-
state/sub-provincial collaboration. Our focus is binational regional
collaboration at the sub-state/sub-provincial level. This level is
only recently receiving the attention it should receive,
commensurate with its importance.
The following major sections include a discussion of the
importance of binational sub-state/sub-provincial regional collaboration in the global economy; a brief
review of European models of binational regional collaboration; a more detailed review of North
American models of binational regional collaboration, including a discussion of the MSU Center for
Community and Economic Development’s engagement with two binational regions in Michigan/Ontario;
and the conclusion.
1.1 The Levels and Value of Binational Collaboration
Binational collaboration occurs on three principal levels: one, the traditional or classic level
between nation-states; two, the sub-national state or provincial level, usually because of physical
proximity between the jurisdictions; or three, the sub-state or sub-provincial regional level, again usually
because of physical proximity between the jurisdictions.
Binational collaboration consists of a framework or process of cooperation and coordination between
two national states, between states or provinces of two national states, or between sub-state/sub
regional entities in two different national states for an identified purpose.4
This proceeds “through a
process of systematic harmonization of policy…that leads to policy parallelism and is driven by the
convergence of socio-cultural values, increased economic integration, and the formation of border-
spanning network institutions.5
4
Emmanuel Brunet-Jailly. “Cascadia in Comparative Perspectives: Canada-U.S. Relations and the Emergence of Cross-Border
Regions.” Canadian Political Science Review Vol. 2. No 2. 109, 2008.
5
Ibid.
Our focus is binational
regional collaboration at the
sub-state/sub-provincial
level.

3
This cultural convergence is especially true in the case of Michigan, USA and Ontario, Canada, which
have been described as being more similar to one another than to their neighboring states and
provinces. This idea is also demonstrated by the Canadian government’s Policy Research Initiative (PRI)
Project for North American Linkages which reported that socio-cultural values are more similar between
Atlantic Canada and the U.S. east coast, Pacific Canada and the U.S. west coast, and within in the Great
Lakes Heartland (including Midwestern America and
Ontario.)
In the 21st
century global economy, the activities of these
levels have become increasingly vertically-integrated.
Binational, or cross-border, interests and organizations
often need to work with various levels of government to
achieve their goals. This means that binational
collaboration results in closer cooperation within each
nation as binational collaboration breaks down barriers
and facilitates partnerships between two nations.
Binational collaboration can take the form of formal arrangements with the execution of treaties or
agreements, or informal arrangements that rely on meetings, discussions, and grassroots activities, or a
hybrid mix of the two. Many informal systems exist in local binational communities that facilitate the
daily lives of their residents and businesses.
A more sophisticated form of binational collaboration involves ongoing binational governance
mechanisms. Binational collaboration is predicated on the understanding of parties in the two national
states, sub-national states, or even sub-state regions that greater binational economic prosperity, better
management of shared natural resources, or some other common cause is feasible through the
collaboration. Binational collaboration facilitates an economic or other type of outcome with greater
benefits than those outcomes resulting from each entity acting unilaterally.
1.11 Traditional or Classic Binational Collaboration
Collaboration at the nation-state level usually entails the governments of two national states
entering a treaty or some other type of formal agreement. This conduct is typical of traditional
diplomacy. Binational collaboration at this level is of course extensive and commands the highest public
profile with its nationwide implications and impact on two nations.
1.111 U.S.-Canada Binational Collaboration
In many cases, binational collaboration occurs between two adjacent countries, like Canada and
the United States.6
Such collaboration may include agreements to manage natural resources, such as
the Boundary Waters Treaty of 1909; or promote trade and commerce as in the Auto Pact of 1965 and
6
Regions.” Canadian Political Science Review Vol. 2. No 2. 109. 2008.
Binational collaboration can take
the form of formal arrangements
with the execution of treaties or
agreements, or informal
arrangements that rely on
meetings, discussions, and
grassroots activities, or a hybrid mix
of the two.

4
the Canada-U.S. Free Trade Agreement (CUSFTA) of 1988; or cooperate on security as in the 2011
Beyond the Border Agreement.
The Boundary Waters Treaty of 1909 is a hugely important binational agreement between Canada and
the United States. Over the past 105 years, this treaty has provided a framework through the
International Joint Commission to manage and settle issues that arise from shared water resources on
the basis of equality between the two countries.
The Auto Pact, formally the Canada–United States Automotive Products Agreement, was signed by
Prime Minister Lester B. Pearson7
and President Lyndon B. Johnson on January 16, 1965. This was a
major step towards integrating the North American automotive industry by reducing production costs in
Canada, lowering prices for consumers, and removing tariffs on cars, trucks, and automotive parts.
The Auto Pact of 1965 helped to
reduce the Canadian balance of
trade deficits resulting from most
automotive parts being made in the
U.S., but it also bolstered the
economies of the two nations
through the elimination of tariffs
and lowering the price of
automobiles. According to Dimitry
Anastakis, “the Auto Pact was an
important step in the creation of a
continental economy.”8
The Auto Pact created a platform
for the Canada-United States Free
Trade Agreement (CUSFTA) that
was signed by Prime Minister Brian
Mulroney and President Ronald Reagan on January 2, 1988 and took effect the following year. The Free
Trade Agreement excluded tariffs quotas, export subsidies, and other types of government interference.
The Free Trade Agreement greatly liberalized trade between Canada and the U.S. by removing tariffs,
but more importantly, provided Canadians unhindered access to U.S. markets and provided U.S.
businesses with access to the Canadian energy industry.
7
Lester Pearson was a statesman of note who received the 1957 Nobel Peace Prize for solving the Suez Crisis in 1956. As the
president of the United Nations General Assembly, he secured support to send UN peacekeeping forces to the trouble spot and
separate the warring parties of Britain, France, and Israel from Egypt and the Soviet Union with the imminent threat of nuclear
war.
8
Dimitry Anastakis. Auto Pact: Creating a Borderless North American Auto Industry, 1960–1971. Toronto: University of Toronto
Press. 2005.
Detroit Skyline and Detroit River
Source: Wikipedia

5
Just four years later, the North American Free Trade Agreement (NAFTA) was signed by President
George H.W. Bush, Canadian Prime Minister Brian Mulroney, and Mexican President Carlos Salinas on
December 17, 1992, that went into effect January 1, 1994.9
NAFTA brought together three of the 10
largest economies in the world, the U.S. with the largest economy and Canada’s ranked #8 and Mexico’s
#9, according to the World Bank.
With the signing of NAFTA, the CUSFTA was expanded to encompass a trilateral North American pact.
U.S.-Mexican tariffs were eliminated or phased out over 10-15 years. In addition to tariff elimination,
NAFTA deepened and extended the Free Trade Agreement. Many observers point out that NAFTA
removed restrictions on the mobility of capital and confers rights on investors, limiting the power of
governments and making it difficult for future governments to change the terms.10
n responding to the post 9-11 world, President Barack Obama and Prime Minister Stephen Harper jointly
announced the Beyond the Border Agreement on December 7, 2011 on border security and reducing
trade regulations. The agreement was designed to coordinate the introduction of new technology to
improve cargo security and screening at points of entry along the border. With such improvements,
congestion will be eased and the time it takes to transport products between the U.S. and Canada will
be reduced. These measures are intended to make it easier for businesses to export their goods. The
U.S. and Canada are also working on streamlining trade regulations or eliminating them in some cases.
1.12 Binational State-Provincial Collaboration: Practicing Paradiplomacy
Subnational collaboration occurs at the state/provincial level and is a type of paradiplomacy,
according to political science researchers. Paradiplomacy refers to international actions by subnational
levels of government in regard to trade, cultural matters, economic development, and other areas.
Paradiplomacy can involve two subnational entities working with one another, or a subnational
government working with a sovereign foreign government. Soldatos defines paradiplomacy as direct
international activity by subnational actors supporting, complementing, correcting, duplicating, or
challenging the nation-state’s diplomacy.11
Whether provincial/state paradiplomacy can be practiced is
determined by the structure of a nation’s constitution and laws.
Some countries, like Mexico, specifically prohibit any international activities by its constituent states.
9
President Bill Clinton, a centrist Democrat, shepherded NAFTA through Congress in 1993, depending on Republicans for the
majority of supporting votes in the House and Senate. As a result of criticism, President Clinton added two side agreements, the
North American Agreement on Labor Cooperation and the North American Agreement on Environmental Cooperation. The Free
Trade Agreement had been highly contentious in Canada with the 1988 election fought largely over the issue. The Liberals and
the New Democrats split the anti-free trade vote in the 1988 election and the pro-free trade Progressive Conservatives slipped
in. Mulroney’s PC party easily passed the 1987 FTA and 1993 NAFTA bills.
10
Robert E. Scott, Carlos Salas, and Bruce Campbell. “Revisiting NAFTA: Still not working for North America’s workers.” EPI
Briefing Paper #173, 2006.
11
Panayotis Soldatos. “An Explanatory Framework for the Study of Federated States as Foreign Policy Actors in Federalism and
International Relations: The Role of Subnational Units” Oxford: Clarendon Press, 1990.

6
Other countries, like the U.S., reserve the sphere of international relations and treaty making to the
federal government but the flexible structure of U.S./state federalism allows states to engage in foreign
relations short of treaty-making. This even includes state participation in binational statutory
organizations like the Pacific Northwest Economic Region (PNWER) or less formal arrangements like the
Council of Great Lakes Governors. U.S. states have also routinely established offices in foreign countries
to facilitate trade and exporting by companies in their states and attract foreign direct investment (FDI).
Still others, like Canada, require provinces to approve treaties and agreements made by the central
government. The levels of Canadian provincial paradiplomacy have been classified by Richard Vengroff,
who identified Quebec and Ontario as the provinces with the highest levels of paradiplomacy.12
Quebec’s paradiplomacy assets include an International Relations Ministry with over 700 employees;
over 550 international agreements since 1964, many with a foreign central government; and a network
of offices in 17 countries across four continents. Ontario has also operated at significant levels of
paradiplomacy, undertaking numerous international trade missions and working to expand cooperation
with actors in Michigan and New York State in the areas of tourism, transportation, energy, and
technology.13
1.121 Binational Multi-State/Multi-Provincial Collaboration
Binational multi-state/multi-provincial collaboration is
generally used to promote trade and investment or manage
common natural resources. For example, the Council of Great
Lakes Governors which includes the governors of the eight
Great Lakes states and the premiers of two provinces14
exemplifies this type of regional collaboration. The Council
was established in 1982 and achieved notable successes with
the Great Lakes Charter in 1985 and Great Lakes Protection
Fund in 1988, among other agreements. The Great Lakes
Charter was a landmark in binational multi-state, multi-provincial regional collaboration, and established
a durable framework to protect Great Lakes waters from diversions out of the Basin. The Great Lakes
Protection Fund was the first of its kind and established funding for research on critical Great Lakes
issues. Despite these significant successes, the Council went into eclipse and met only intermittently for
two decades. It met for the first time in eight years last June (2013).
As the Council is an informal, voluntary organization, it depends on the whims of current governors and
lacks institutional consistency over time as evidenced by its fragmentary performance since 1990. The
12
Richard Vengroff and Jason Rich. “Paradiplomacy and the Canadian Provinces.” The American Political Science Association.
2004.
13
Ibid.
14
The governors of the states of Michigan, Minnesota, Wisconsin, Illinois, Indiana, Ohio, New York, and Pennsylvania and the
premiers of the provinces of Ontario and Quebec.
Paradiplomacy refers to
international actions by
subnational levels of government
in regard to trade, cultural
matters, economic development,
and other areas.

7
Council focuses on Great Lakes management and environmental policy as an avenue for economic
policy.15
The Pacific Northwest Economic Region (PNWER) provides a powerful model of binational multi-state,
multi-provincial collaboration. PNWER is a statutory organization that includes five U.S. states
(Washington, Oregon, Idaho, Montana, and Alaska) and five Canadian jurisdictions (the provinces of
British Columbia, Alberta, and Saskatchewan and the Yukon Territory and Northwest Territories). Each
jurisdiction adopted legislation to implement its PNWER membership. PNWER members collaborate on
policy to improve regional economic well-being and strengthen regional clout in national and
international settings.16
As a statutory body, it functions as an ongoing institution without its
institutional functionality being subject to the whims of political leaders.15
PNWER has done groundbreaking work In promoting more effective border management, critical
infrastructure security, energy planning, cross-border workforce mobility, and economic innovation.
1.13 Binational Regional Sub-State/Sub-Provincial Collaboration
Binational regional sub-state/sub-provincial collaboration has been largely neglected as an area
of study until recently. This type of collaboration may include local units of government; private sector
actors; nongovernmental organizations; economic development agencies and organizations (e.g.,
federally-designated economic development districts, or EDDs); and universities and colleges. Sub-
state/sub-provincial or regional binational collaboration is extensive in Europe. EUREGIO in the Dutch-
German region situated between the Rhine, Ems, and Ijessel Rivers is the pioneer of European cross-
border collaboration. EUREGIO has a long history (dating back to the 1950s) and an advanced level of
governance that includes a binational regional parliament. The binational Metro Oresund Region which
includes the areas of Copenhagen, Denmark and Malmo, Sweden may be considered the flagship of
contemporary binational regional collaboration.
The European Community established the International Region Community Initiative (INTERREG)
program in 1990 to encourage economic cooperation in cross-border regions, providing a top-down
approach completely unlike any structure in North America. EUREGIO, it should be noted in this regard,
predates INTERREG by some 30 years.
The supra-national framework of the EU European Territorial Cooperation program, formerly the
INTERREG program, has no counterpart in North America. Another obvious difference between the EU
and North America is the number of countries, with many more collaborative combinations possible in
the EU than in North America. Independent of the top-down support of binational regional collaboration
15
Emmanuel Brunet-Jailly. “The State of Borders and Borderlands Studies 2009: A Historical View from the Journal of
Borderlands Studies.” Eurasian Border Review. 2010.
16
Pacific NorthWest Economic Region website. “About Us.” Retrieved December 27, 2013 from
http://www.pnwer.org/AboutUs/Background.aspx

8
and the number of countries, the critical piece is whether leaders and stakeholders in the binational
region have the willingness and desire to work together.17
Binational regional (or cross-border area) collaboration is critical as a conduit to the global economy in
the 21st
century. Rationales for binational regional collaboration include addressing positive or negative
externalities that cross borders, overcoming peripherality in terms of both national policymaking and
competing for firms and talent, and creating economies of scale that leverage binational assets and
achieve more potent critical mass.
In binational regions, opportunities for firms and workers are increased through a larger labor market,
an asset that is attractive to knowledge-based companies. Accessing knowledge and business networks
helps SMEs that lack the global reach of large firms. Achieving critical mass can increase the region’s
visibility “as an innovation node in global networks, raising the region’s profile for public and private as
well as national and international innovation-related investments.”18
However, our knowledge of the dynamics and functioning of binational regions is woefully incomplete:
…there is no model that addresses, first, why some borderlands integrated economically
but not politically, while others have institutions spanning an international boundary
without the presence of intense economic linkages, and second, what role local political
clout and local culture play in defining and shaping borderlands…19
We hope the discussion of binational regional collaboration here illuminates the dynamics and benefits
of binational regional collaboration to some degree and provides future directions for U.S. EDA,
International Trade Administration (ITA), other policy makers, and their stakeholders to pursue.
1.131 The Role of Economic Development Districts in Binational Regional Collaboration
Federally-designated Economic Development Districts (EDDs) that are border or near-border
regions can play significant roles in the development and implementation of binational regional
collaboration strategies. Indeed, this EDD role could and should be a new dimension of 21st
century
comprehensive economic development strategies (CEDS) for competing in the global economy and
should be supported by the U.S. Economic Development Administration with adequate funding of EDDs.
Our U.S. EDA-funded field experience at the MSU Center for Community and Economic Development
included working with a border-region EDD and a near-border region EDD along with a key local border
economic development organization (EDO) with a bridge to Canada. These EDDs and the EDO
demonstrated the capacity to initiate and develop valuable initiatives with a focus on binational regional
17
Carl Ek and Ian F. Fergusson. “Canada-U.S. Relations.” Congressional Research Service. 2012.
18
OECD. “Regions and Innovation: Collaborating Across Borders.” OECD Publishing. 2013.
19
Emmanuel Brunet-Jailly. “The State of Borders and Borderlands Studies 2009: A Historical View from the Journal of
Borderlands Studies.” Eurasian Border Review. 2010.

9
collaboration. This strategic binational approach can clearly be used to further regional economic
development consistent with (or perhaps broadening) their CEDS goals.
The range of models described in this research paper provides a solid starting point for consideration by
the U.S. EDA and its partners and stakeholders of the appropriate scope and scale of binational regional
collaborative data and initiatives that could be incorporated in the future CEDS of border and near-
border EDDs.
“Greater knowledge of (binational or cross-border regions) will enrich the policy toolbox of governments
and contribute to a better understanding of the role governments play in the face of the rising
importance of (these regions),” according to one of the leading North American experts on cross-border
regions.20
In the hyper-competitive global economy, it is critical that U.S. EDDs in border and near-border regions
are equipping their toolboxes with all the tools that are available to them. We believe cross-border
collaboration is an important tool that’s been largely neglected in North America. It’s important to
change that now.
To foster greater understanding of the benefits of cross-border regions, we describe 13 different models
of binational regional collaboration in this paper. We believe this is a good place to commence
consideration of this innovative, 21st
century global approach to comprehensive regional economic
development strategies.
20
Emmanuel Brunet-Jailly, Tony Payan, and Gary Sawchuck. “The Emergence of Cross-Border Regions Along the Mexican-US
Border and in Europe: Lessons for Canada.” Government of Canada Working Paper Series 35. 2008.

10
Soo Locks, Twins Saults of Michigan and Ontario
Source: Wikipedia

11
2.0 Theories of Binational Regionalism and Beyond: A Brief Review of the Literature
Our focus is on binational regional collaboration at the sub-state/sub-provincial level (or otherwise
referred to as cross-border areas).
Keating (1997) provided a template for analyzing regionalization, which geographers call a re-scaling
process, by identifying the aspects of political mobilization for the processes of region building,
institutional restructuring resulting in new governance structures, and functional needs providing
rationales for the actors involved.
In an overview of European geographical research on border regions, van Houtum (2000) sees three
theoretical strands of geographic analysis: the flow approach based on classic economic analysis of
borders causing discontinuities and increasing the marginal costs of interactions; the cross-border
cooperation approach that has evolved in economic and geographic studies since the early 1990s with
greater interest in integration and cooperation in economic geography; and the people approach with
an emphasis on the mental creation, symbolic shaping, and reshaping of borders by humans.
Blatter (2004) convincingly argues that the conceptual template to describe and compare political
cooperation across national boundaries must be broader than using the dichotomy of government
versus governance and also have greater precision in describing the types of interactions. He poses two
questions for empirical research on cross-border regions (with his research focusing on the Californias
and Cascadia in North America; Lake Constance and the Upper Rhine in Europe):
1) Do multiplying levels of governance lead to an extended version of federalism or do the
‘unbundling’ of governance institutions into a functionally-differentiated system with varying
scales result in ‘deterritorialization’?
2) What is the extent of the transformation from government to governance in terms of
involving private and non-profit actors in institutions of governance, and what mechanisms bind
these actors together?
Blatter’s template is also grounded in Hooghe and Marks’ (2003) typology of multi-level and
functionalist governance. The first type is based on traditional concepts of federalism where
jurisdictions are designed around communities with bundled competencies, stable over time, and
limited in number. The second type is based on public choice theory and characterized by jurisdictions
concentrated on specific policy problems with functional specificity and fluid over time with the
possibility of growing in number.
Blatter’s conceptual model is further informed by Castells’ (1996) ‘network society’ where a ‘space of
flows’ supersedes the traditional ‘spaces of place’ as the dominant logic for social organizations and
institutions. In the process of decentralization and regionalization, a more autonomous level of
governance results on the subnational level (Keating 2003). Blatter notes that scholars of European
integration lean toward a classic federalism to understand these processes with the regional
cooperation mimicking the integration of the European Union model. He also notes the term of
glocalization used by researchers outside the EU context to describe stronger interdependencies and
interactions between local and global actors.

12
Blatter suggests four ideal types of cross-border political institutions based on territorial and functional
governance, and instrumental/control and identity-providing/orientation modes. The four types are
named commission and consociation as types of territorial governance (spaces of place) and connection
and coalition as types of functional governance (spaces of flows).
A 2007 case study by Perkmann of the EUREGIO, the German-Dutch binational regional organization
that pioneered European regional cross-border cooperation, provides an initial typology for classifying
cross-border regions based on political mobilization, governance building, and strategic unification,
based on Keating’s template. Perkmann also defines a cross-border region as comprising contiguous
sub-national units from two or more nation states. This definition is likewise applicable to a binational
region, the term we use in this paper. He further observes that the existence of integrated cross-border
spaces is not a novelty in any historical sense; but having explicit strategic objectives pursued by social
forces within and beyond the region is.
In a seminal 2009 article, Brunet-Jailly points out that the study of borderlands needs more than partial
explanations focusing on market economics, government initiatives, and the roles of local communities
and culture to account for the relative transparency of borders in economically-integrated globalization.
As previously pointed out in sub-section 1.13, he concluded that there is no model that addresses:
…first, why some borderlands (or binational regions in the terminology of our paper here)
integrate economically but not politically, while others have institutions spanning
an international border without the pressure of intense economic linkages, and second,
what role local political clout and local culture play in defining and shaping
borderlands and boundaries.21
Decoville etal. (2010) analyze the process of spatial integration in 10 European cross-border
metropolitan regions. Spatial integration can be seen as a process of convergence between distinct
territories that results from intensified interactions between social, political, and social actors. It was
also demonstrated that strong economic interactions have an impact on the cross-border integration of
communities, using the measure of the proportion of residents based on the other side of the border.
The analysis looks at cross-border regions and the differentials in their GDP per capita, with cross-border
commuting being a major indicator. The authors developed three models of cross-border integration: by
specialization, polarization, and osmosis. In a functional specialization, cross border commuting goes
primarily from the periphery to the metropolitan center with an opposing residential flow toward the
periphery. The Oresund (Copenhagen, Denmark-Malmo, Sweden) Region is an example. In integration
by polarization, the flows of labor and residential displacements converge on the dominant urban
center. Basel is an example. In integration by osmosis, bi-directional flows of cross-border commuting
and residential movements occur. In this type of integration, the attractiveness of the metro center is
21
Emmanuel Brunet-Jailly, Tony Payan, and Gary Sawchuck. “The Emergence of Cross-Border Regions Along the Mexican-US
Border and in Europe: Lessons for Canada.” Government of Canada Working Paper Series 35. 2008.

13
not high or the peripheral areas are attractive enough to contest the direction of the flow. Lille and
Aachen-Liege-Maastricht are cross-border regions that reflect this model.
Since the signing of the North America Free Trade Agreement (NAFTA) in 1993, researchers and writers
have contemplated the future steps that the U.S., Canada, and Mexico might take to reach the next level
of cooperation and collaboration. Two recent books have looked at fundamental transformation of
cross-border integration. Dianne Francis has looked at a complete U.S.-Canada integration, and Robert
Pastor has contemplated the huge step of a fully-integrated North American continent.
In the Merger of the Century: Why Canada and America Should Become One Country (2013), Francis
makes the case for the complete political integration of the U.S. and Canada. She argues that sharing
the world’s largest border with so many similarities in values, lifestyles, aspirations, and sectoral
economies should make such a merger modest. The two countries are each other’s largest investor,
customer, and supplier. Canada ships most of its oil to the U.S., and in return, purchases more U.S.
products than does the entire European Union. The U.S. and Canada are already far more integrated
than most understand.
The unification of the U.S. and Canada would result in an economy larger than the European Union’s.
This new entity would have the world’s most powerful military controlling more oil, water, metals,
energy, arable land, resource potential and technology than any jurisdiction on Earth. Francis contends
that the current U.S.-Canada free trade deal is making the border worse off, hurting trade and tourism.
New regulations create thousands of barriers for economic prosperity and integration, not to mention
the total cost of these barriers. Both countries are more regionalized than ever; the level of
statesmanship needs to improve before any steps are taken for complete integration. Even though the
merger seems logical, the hurdles are quite daunting.
Pastor (2011) offers a broad vision and a detailed blueprint for an integrated, dynamic, and equitable
North America. Arguing that NAFTA's mandate was too limited to address a new continental agenda and
that Interest groups and nativism inhibited bolder proposals, the three governments stalled in providing
dynamic continental leadership. To overcome resistance and inertia, leaders need a sufficiently large
idea to inspire people in all three countries to forge a formidable region to compete with the East Asia
powerhouse. According to Pastor, the North American idea--once woven into the national consciousness
of the three countries--could mobilize public support for continental solutions to problems that have
confounded each nation working alone. To stimulate trade and reduce illegal migration, for example,
the three countries should establish a fund to invest in the continent's infrastructure.

14
“Collaboration is important, not just because it’s a better way to learn. The
spirit of collaboration is penetrating every institution and all of our lives.
So learning to collaborate is part of equipping yourself for effectiveness,
problem solving, innovation and life-long learning in an ever-changing
networked economy.”
– Don Tapscott, Rotman School of Management, University of Toronto.

15
3.0 The Importance of Binational Regional Collaboration at the Sub-State/Sub-Provincial
Level in the Global Economy
The global economy presents an entirely different set of market opportunities for local firms than the
domestic markets they are more familiar with. These opportunities require a different set of lenses and
an evolving mind-set for local firms to create innovative new products and services, and market these
goods and services to targeted export markets. These markets are targeted on the basis of being price
competitive and offering innovative products or services that appeal to that market. It is increasingly
understood that regions, with their respective knowledge assets and product mix, are the appropriate
vehicles for competing successfully on the hyper-competitive global playing field.
The Organization for Economic Cooperation and Development (OECD)22
is providing valuable global
leadership in its recognition of the critical importance of regions and cross-border regions as vehicles for
innovation. In recognizing the role of specific places, focused research and analysis of these regions can
enhance understanding of their growth opportunities. No one size fits all. Various measures of the
benefits of innovation activities find that the strongest interactions take place in close proximity, within
a radius of approximately 200 kilometers (or 120 miles), according to the OECD.
Describing the OECD’s approach to regional innovation further:
The increasing globalization of innovation forces regions to think beyond their borders.
The share of patents with a foreign co-inventor has doubled from 10% to 20% over the
past three decades. The share of scientific publications with an international co-author
has tripled from around 7% to 22%. Many firms innovate with international partners, but
that rate is much higher for large firms than for small or medium enterprises. Firm collab-
oration with a cross-border neighbor can be a stepping stone to wider global reach.
However, borders remain a barrier, even for neighboring regions.
Cross-border policy efforts have previously focused on border barriers, but considering
border opportunities is a newer approach. In the field of innovation policy, there are many
unknown factors but also many possibilities. To support innovation-driven growth,
innovation policy tools are an addition to the toolbox for cross-border regions.23
22
The Organization for Economic Co-operation and Development (OECD) provides a forum for the 34 market democracies to
address the economic, social, and governance challenges of globalization as well as exploit its opportunities. OECD provides a
setting where policy experiences can be compared, answers sought to common problems, good practices identified, and
domestic and international policies coordinated. The OECD often works closely with the EC. The U.S., Canada, and Mexico are
members.
23
Karen Maguire. “Why Consider Cross-Border Policies to Support Regional Innovation?” Nordregio News. November, 2013.
Retrieved December 29, 2013 from http://www.nordregio.se/en/Metameny/Nordregio-News/2013/Cross-Border-Innovation-
Policy/Context/

16
The importance of binational regions, or cross-border regions, was recognized by the Government of
Canada in its 2008 Final Report titled The Emergence of Cross-Border Regions Between Canada and the
U.S. This report was the result of a four-year long research effort by the Policy Research Initiative (PRI), a
Government of Canada think tank responsible for “cross-cutting research in support of medium-term
policy planning.”
The robust PRI policy research on North American linkages started in 2004 with extensive survey
research and analysis in 2005, and concluded with six regional roundtables and a workshop in
Washington, DC in 2006. The NAFTA-propelled North American integration provided the impetus for
policy leaders and researchers to look more carefully at the “increasingly apparent strong and multi-
dimensional linkages that are taking hold at the regional
level, especially between adjacent and nearby areas along
the border.”24
The OECD and the Canadian PRI research reflects a
growing appreciation for binational regional collaboration
in the international community. The recent OECD and PRI
research comes after 20 years of the EC’s INTERREG
program supporting the cohesion and integration of Europe through cross-border cooperation. In the
current search for effective economic development approaches in the global economy, innovative
collaborative networks are emerging as a critical focal point.
Binational regional collaboration offers a genuinely new economic development approach in North
America, provided that international borders are not seen as barriers. To better understand the process
of binational regional collaboration, we examine the factors that support binational regional
collaboration; the steps to operationalize binational regional collaboration; and the stages of regional
innovation systems.
3.1 Operationalizing Binational Regional Collaboration
The 2013 OECD report Regions and Innovation: Collaborating Across Borders25
provides
guidance on cross-border regional innovation starting with the following threshold questions:
 When does it make sense to collaborate with cross-border neighbors for innovation-
driven economic development?
 What kinds of governance approaches can be used to manage such cross-border
collaboration?
24
Government of Canada PRI. “The Emergence of Cross-Border Regions Between Canada and the United States.” PRI Final
Report, 2008.
25
Binational regional collaboration
offers a genuinely new economic
development approach in North
America, provided that international
borders are not seen as barriers.

17
 What are the policy instruments to facilitate cross-border collaboration for innovation?
To move the process forward to determine the viability of binational regional collaboration and develop
collaborative strategies, when appropriate, five sequential steps are identified and include:
1. Information: Mutual exchange of policy information.
2. Experimentation: Ad hoc and temporary common initiatives without joint funding.
3. Alignment: Mutual opening of programs or structures across borders with no joint funding.
4. Joint Actions: Policy, structures, and actions funded by all participating units.
5. Joint Strategy: Common strategy adopted at the level of the cross-border area, translated
into the common policy mix and co-funded by all participating units.26
In determining whether innovation-driven binational regional collaboration will be viable, six factors27
should be evaluated. The configuration and extent of each factor
contributes to the level of innovation culture and its
development potential. The evaluation can also ensure strategies
that reveal why the neighboring area is a good partner for
collaboration, a point stressed in the OECD report. The six
factors include:
 Proximity
 Economic structure/specialization patterns
 Policy structures
 Institutional set-up
 Science base/knowledge infrastructure
 Nature of linkages
These six factors are all basic constructs. What is important is to examine each of these factors in light of
the stages of development in their innovation systems. We discuss this aspect in the next sub-section.
Regional leaders and stakeholders can determine the viability of future binational regional collaboration
by assessing the conditions and constraints of each factor in their region.
For the successful practice of innovation-driven collaboration, a region is a more appropriate scale than
a locality because it includes the most relevant range of firms, universities, talent, and other innovation
26
OECD (2013), Regions and Innovation: Collaborating across Borders, OECD Reviews of Regional Innovation, OECD Publishing.
Retrieved on December 31, 2013 from http://dx.doi.org/10.1787/9789264205307-en.
27
The six innovation system factors are derived from Lundquist and Trippl, Distance, Proximity and Types of Cross-border
Innovation Systems: A Conceptual Analysis. They identify five elements for analysis and the importance of proximity in
constructing cross-border strategies. We refer to six innovation system factors: their five elements and proximity.
“…innovative collaborative
networks are emerging as a
critical focal point.”

18
actors. Binational regional collaboration fundamentally relies on the proximity of regions to one
another. But, importantly, proximity is not restricted to a strictly-spatial definition. Three types of
proximity are identified in the OECD report:28
 Physical proximity
 Relational proximity
 Functional proximity
Physical proximity refers to the spatial definition of proximity that is used to analyze the accessibility of
locales to one another. Accessibility may have less to do with measured distance, however, than with
the time and costs of interactions between binational regions. Accessible regions allow unfettered flow
of goods, people, and knowledge, all of which contribute to the development of innovation. Regions
with immediate physical proximity are natural candidates for binational regional collaboration.
Relational proximity refers to several aspects of the relationship between regions: social dynamics,
governance structures, regulations, and cultural identities. These aspects play an important role in the
facilitation and implementation of binational regional collaboration.
Functional proximity refers to the capabilities and capacities of each respective side of the border. If
great disparities exist between the capabilities and capacities of each actor, there may be little mutual
benefit to collaboration. The functionality of a region can depend on the existence of physical and
relational proximities. Regional functionality for collaborative efforts also depends on data, that may or
may not exist, in order to correctly define the cross-border area. For defining the cross-border area, use
data, the OECD report encourages, but don’t wait for complete data before collaborating.
The OECD report also identifies four economic rationales that support cross-border collaboration and
new market opportunities:
 Economies of scale
 Economies of scope
 Public goods
 Externalities
Economies of scale are supported by the growth of both labor markets and the knowledge base that
occurs with binational regional collaboration. Economies of scope can occur in the form of
complementary markets when each respective side of the border is proficient in a complementary
activity to the other.
Public goods are goods that would not typically emerge under competitive market conditions. These are
exemplified by the creation of a regional identity or a regional marketing campaign. These products
28
K. Lundquist and M. Trippl (2013). Distance, Proximity and Types of Cross-border Innovation Systems: A Conceptual Analysis.
Regional Studies. Vol. 47, No. 3, pp.450-460.

19
benefit both sides of the border, but would not exist without collaboration. Similarly, the economic
benefits of externalities such as knowledge spillovers, occur with successful collaboration.
The OECD report describes six European case studies that demonstrate these collaborative economic
opportunities and the specific drivers of those opportunities. Our paper here discusses five of the six
OECD case studies in section 4.0.
3.2 Stages of Regional Innovation Systems
An integrated regional innovation system (RIS) is the key outcome of effective binational
regional collaboration. The OECD report draws upon recent research by Lundquist and Trippl29
in
developing this regional innovation paradigm. These researchers define a regional innovation system as
a regional space in which firms, people, and institutions interact to develop and use knowledge for
innovation, and specifically those with an international border (emphasis added).
In their paradigm, the six innovation factors of regional innovation systems can be characterized as
being in one of three stages of development:
1. Weakly-integrated, cost-driven;
2. Semi-integrated, emerging knowledge-driven; and
3. Strongly-integrated, symmetric innovation-driven.
These six innovation factors include economic structure/specialization pattern; science base/knowledge
infrastructure; nature of linkages; institutional set-up; policy structure; and accessibility. The conditions
and constraints of each factor can be evaluated to determine the capacity of a binational region for joint
innovation activities. The six innovation system factors are laid out in a matrix with the three stages of
development in the table from Lundquist and Trippl (2013) on the next page.
The extent of integration is determinative in this evaluative framework. Integration is a function of
increased interaction and collaboration across the binational region. The development of a binational
regional innovation system, then, requires increased collaboration within each of the six factors (listed
in the left column).
Lundquist and Trippl emphasize that the creation and successful operation of a regional innovation
system is essential to a region in creating a long-term competitive advantage in the global knowledge
economy. Their paradigm makes a major contribution to creating an intellectual framework for
understanding the dynamics and characteristics of the relationship between innovation and binational
regional collaboration. This paradigm will undoubtedly evolve as binational regional collaboration
broadens and intensifies.
29
K. Lundquist and M. Trippl (2013). Distance, Proximity and Types of Cross-border Innovation Systems: A
Conceptual Analysis. Regional Studies. Vol. 47, No. 3, pp.450-460.

20
Table 1: Stages of Regional Innovation Systems (RIS)
Stage I:
Asymmetric cost-driven
system
(weakly-integrated)
Stage II:
Emerging knowledge-
driven system
(semi-integrated)
Stage III:
Symmetric innovation-
driven system
(strongly-integrated)
Economic
structure/specialization
pattern
Strong differences in
specialization → cognitive
distance (lack of synergies).
Functional distance.
Emerging synergies and
complementarities (cognitive
proximity) and functional
proximity in a few business
areas.
Related variety,
proximity in wide range of
business areas.
Science base/knowledge
infrastructure
Strong differences in
specialization → cognitive
distance (lack of synergies).
Functional distance.
Fruitful synergies (cognitive
proximity in a few scientific
fields.
Related variety,
proximity in wide range of
scientific fields.
Nature of linkages Cost-driven asymmetrical
linkages. Lack of knowledge
flows. Strong embeddedness
in established
RIS/NIS/international
linkages.
Decreasing asymmetry→
interactive links in selected
fields. Links to existing
RIS/NIS/global level more
important.
Intensive cross-border
knowledge exchange.
Reshaping importance of
established links.
Institutional set-up High degree of (hard and
soft) institutional distance.
Institutional thinness at the
cross-border level. Low
acceptance of cross-border-
integration processes.
Decreasing levels of (hard
and soft) institutional
distance. Rise of institutional
set-up at the cross-border
level. Increasing acceptance
of building a common cross-
border region.
Low levels of (hard and soft)
institutional
distance/remaining distances
mediated by specialized
bridging organizations.
Institutional thickness at the
cross-border level. High
acceptance of creating a
common innovation system.
Policy structure Absence of policy
“leadership” with vision and
lack of legitimacy. Low or
asymmetric support from
nation states.
Emergence of mechanisms
for coordination of
innovation policies.
Transparent and democratic
governance structures.
Inclusive forms of governance
and civic participation.
Accessibility Low/medium degree of
physical proximity.
Medium/high degree of
physical proximity.
High degree of physical
proximity

21
4.0 European Models of Binational Regional Collaboration: Integration and Cohesion
Binational regional collaboration is far more institutionalized in Europe than in North America as a result
of a very different history, geography, and institutional development.
After suffering the devastation of two world wars between neighboring states in the 30-year period
between 1914 and 1945, European leaders sought to insure peace through an integrated Europe in the
second half of the 20th
century. Structural European integration started with the European Coal and
Steel Community in 1950 and culminated with the establishment of the European Union by the Treaty of
Maastricht in 1992. These major milestones were punctuated by the establishment of the Commission
of the European Communities, the European Parliament, and Council of Ministers in 1967. The Single
European Act was signed in 1986.
With these successful unifying measures and achievements,30
European Commission (EC) leaders
intensified their efforts at European cohesion and integration with the establishment of the
International Region (INTERREG) Community Initiative program in 1990 to support Euroregion cross-
30
The European Union was awarded the 2012 Nobel Peace Prize for six decades of work in advancing European peace.
Europe
Source: Wikipedia

22
border projects. The program was recently re-named European Territorial Cooperation, and “its place-
based focus is used to solve problems that transcend boundaries and require a common approach.”31
“(The) European Territorial Cooperation (program) offers a unique opportunity for regions and Member
States to divert from the national logic and develop a shared space together, build ties over borders, and
learn from one another. It is a laboratory of EU integration and EU territorial cohesion,” according to
José Palma Andres, the director of the European Commission Directorate-General for Regional Policy.32
What are Euroregions? “Euroregions are widely understood, if not precisely defined. While the term
refers to a transnational cooperative arrangement among adjoining local or regional authorities (and
sometimes other parties), they are also sometimes understood as the actual areas.”33
The first generation of INTERREG Community Initiatives were funded in the early 1990s with the goals of
erasing inner European borders and promoting economic development and cooperation between the
regions that had been conflict zones for centuries.
The Association of European Border Regions (AEBR) was created in 1971 at the first Conference of
European Border Regions. EUREGIO was a founding member (see 4.1 below).
We report in our paper here on five of the six case studies of cross-border regional collaboration
described in this OECD report and we also include EUREGIO as our sixth European case study:
 EUREGIO (Netherlands-Germany)
 Oresund Region (Denmark-Sweden)
 Helsinki-Tallinn (Finland-Estonia)
 Hedmark-Dalarna (Norway-Sweden)
 Bothnian Arc (Sweden-Finland)
 Ireland-Northern Ireland (UK).
Each case study includes a profile of the cross-border area and its relevance to innovation, driving forces
and key actors, governance, and cross-border policy mix.
31
European Union. “European Territorial Cooperation: Building Bridges Between People.” European Union, 2011.
32
Ibid.
33
Government of Canada. Emergence of Cross-Border Regions along the Mexican-US Border and in Europe. February 2008.
Retrieved on December 31, 2013 from http://dspace.cigilibrary.org/jspui/bitstream/123456789/27667/1/WP%20035-Final_US-
Mexico%20Sawchuk.pdf?1.

23
4.1 EUREGIO (Netherlands-Germany): Pioneering Binational Regional Collaboration
EUREGIO in the Dutch Enschede-German Gronau Region pioneered the art and practice of
European binational regional collaboration. Over a 40-year period, EUREGIO has developed into a cross-
border regional development agency after starting as a loose network of ceremonial elements in the
1950s. It was a binational grass roots effort without any external encouragement or coordination34
.
Figure 1:
The EUREGIO region
The EUREGIO is located in parts of three Dutch provinces—Gelderland, Overijessel, and Drenthe—and
the two German lander (states) of North Rhine-Westphalia (Nordrhein-Westfalen) and Lower Saxony
(Niedersachsen). These provinces and lander enjoy substantial economic assets with significant
manufacturing and agricultural sectors, e.g., Volkswagen has four production plants in North Rhine-
Westphalia.
34
Markus Perkmann (2005). “Cross-Border Co-Operation as Policy Entrepreneurship: Explaining the Variable Success of
European Cross-Border Regions”. CSGR Working Paper. No. 166/05. May 2005
Source: EUREGIO, “Official Map of EUREGIO,” 2014

24
This binational partnership has deep roots, dating to the 1950s when local elected officials in the Dutch
Enschede region and the German Gronau region saw that cross-border cooperation would benefit the
entire binational region. EUREGIO was formed formally in 1958 (coincidentally the same year as the
European Economic Community was created) with the first indirectly-elected parliament that
represented cities, counties, and regions on both sides of the Dutch-German border. Three
associations—the Dutch Regio Twente and Achterhoek and German Kommunalgemeinschaft Rhein-
Ems—were the founding partners of the transborder parliament. In 1972 about 100 municipalities and
local districts formed the EUREGIO to implement their socio-cultural policies.
During the 1980s, the organization expanded the socio-cultural agenda to include socio-economic
policies. “Despite language differences, it seems that, because they believe in cooperation, these
borderland communities have successfully created institutions that span the border.”35
Within the EUREGIO 129 Dutch and German municipalities, towns, and administrative districts work
together across the border. They have been assigned the task to create and develop better relations at
all levels and in all spheres of life between citizens and authorities. EUREGIO has spent more than 50
years building and reinforcing cross-border structures economically, socially, and otherwise.
All municipalities, towns, and administrative districts that participate are represented in the
Association's Assembly. The municipalities that are members also send representatives into a cross-
border regional parliament called the EUREGIO Council.
The EUREGIO Council consists of 41 Dutch and 41 German representatives. The EUREGIO Board forms
the executive committee of the organization. The daily work is coordinated and implemented by the
EUREGIO office located at the Dutch-German border crossing of Glanerbrug-Gronau where some 30
German and Dutch employees cooperate. Representatives from all kinds of social groups, organizations,
and institutions work together in various EUREGIO working committees on cross-border ideas and
projects. The EUREGIO-Mozer-Commission plays a special role in the social and cultural spheres offering
a wide range of support for cross-border projects in the field of sports, art, culture etc.
The transfer of ideas and experiences with other border regions has a long tradition in the EUREGIO.
EUREGIO is one of the charter members of the Association of European Border Regions (AEBR) whose
secretariat general is still located at the EUREGIO house in Gronau/Enschede. Representatives and
employees of border regions from all over Europe visit the EUREGIO headquarters every year to learn
more about cross-border cooperation.
EUREGIO works across borders in a systematic rather than an ad hoc way and in every area of possible
regional cross-border cooperation. “This was a radical change in carrying out cross-border work and
seems to be a fundamental difference between EUREGIO and other border regions.” EUREGIO
35
Emmanuel Brunet-Jailly. “The State of Borders and Borderlands Studies 2009: A Historical View and a View from the Journal
of Borderland Studies.” Journal of Borderlands Studies. 2009

25
participants emphasize that the organization does not add new levels of bureaucracy or administration.
Instead, “(it) is a cross-border ‘turntable’ in which cooperation is concentrated.”36
In the earlier stages of development, a loosely-constituted working group came together in which
representatives of local and regional organizations could cooperate. However, “it is important to find
through these cross-border platforms a reconciliation of the varied structures and skills on both sides of
the border.” Buy-in at the national level is also seen as a prerequisite for success along with the
cooperation in the cross-border area.
EUREGIO participants also strongly contend that a comprehensive strategy is needed that includes
economic and infrastructural components on an equal footing with socio-cultural development.
“Through socio-cultural cooperation, psychological barriers and prejudices (can be) set aside…If Europe
does not grow together at the borders, which are the seams of the (national) states, no European Union
can develop in the long term.”37
Cross-border cooperation in economic, infrastructural, and environmental areas has demonstrated its
practical value on the ground. Border regions create a regional lobby for economic development, and
regions often push for economic development initiatives on the national level in each national state.
4.2 Oresund Region (Copenhagen, Denmark-Malmo, Sweden): A Binational Metro Region
The binational Metro Øresund Region of 3.8 million inhabitants is connected by a newly-built
(2000) bridge spanning the Oresund Sound (the strait between the North Sea and the Baltic Sea that is
the busiest waterway in the world). The bridge connects the areas around the Danish capital of
Copenhagen (population of 1,230,728 in 2013) and the Swedish cities of Malmo (population of 278,523
in 2007), Lund (population of 82,800 in 2010), and Helsingborg (population of 97,172 in 2010) in
Sweden’s southernmost county, Skane. Two-thirds of the Region’s population are concentrated in
Denmark.
36
Wim L.G. Schelberg EUREGIO: Pioneer in the Practice of European Cross-Border Co-operation. Volume 49, no.2 Summer
2001.
37
Wim L.G. Schelberg EUREGIO: Pioneer in the Practice of European Cross-Border Co-operation. Volume 49, no.2 Summer
2001.

26
Figure 2:
Binational Oresund Region
Source: Center for Caucasus Studies, Oresund University
This region represents a highly-developed binational collaboration model with the international bridge;
cross-border science and technology innovation; and the stable binational Oresund Committee. But the
Oresund region also lacks many elements of strong collaboration: there is a shortage of project
continuity and thus limited effectiveness of initiatives by the Oresund Committee. And the Oresund
University recently closed.
The Region enjoys a highly-educated workforce with 35% of that workforce having a college-level
education. Specialization in high-tech industries depends on a few large corporations and the
consequent vulnerability to corporate decisions. However, new firm creation in the Region is better than
their national contexts: 26% of all new businesses in Denmark and Sweden were launched in the Region.
Its most important high-tech specializations include pharmaceuticals and electro-mechanical
equipment.
Two large scientific facilities for materials science research are being built (MAX IV and the European
Spallation Source). The OECD report on the Oresund Region points out that exploiting
complementarities in knowledge assets is a driving force for the Region that could be more fully
exploited. The Medicon Valley Alliance promotes external linkages to global life science knowledge hubs.
However, the loss of AstraZeneca on the Swedish side has contributed to a lack of exploiting key
complementarities.
Branding is another key objective. Since the 1990s, many “O” organizations have been started to bring
life to the Oresund brand. Any innovation policy changes that occur will focus on the international brand
of the Oresund Region and creating an Oresund identity that still supports its diverse populations.

27
Governance is institutionalized through the Oresund Committee and supported by several public,
private, and non-profit organizations. Local and regional authorities are members, but national agencies,
firms, and universities are not. A 10-person
Secretariat provides staff support, and the
Committee is complemented by organizations like
the Oresund Direkt to support cross-border labor
market integration and the Oresund Institute
which conducts research in the Region. The
Oresund Business Council, the former Oresund
University, and the Oresund Committee provided
the key leadership in the development of the
Oresund as a formal cross-border initiative.
The Oresund Committee adopted a long-term
vision for 2020 in its Regional Development
Strategy (ORUS) in 2010 with four themes,
including knowledge and innovation as one.
The OECD report on the Oresund Region observes
that “this is one step ahead of most other cross-
border regions where strategies are limited to ad
hoc projects. But a joint economic development
strategy targeting innovation has not been
drafted. Local and regional agencies are involved
in joint strategies in areas like land use planning, transport, and the environment. A future European
Territorial Cooperation (formerly INTERREG) program will support joint strategies with more precise
goals and indicators.
With much of the Oresund Region’s population aging, new opportunities for innovation in the medical
sector are created, including facilitating binational patient mobility and large scientific infrastructures for
the Oresund international brand.
The cultural and economic momentum inspired by the bridge in 2000 has plateaued. Regional officials
are seeking new ways to encourage binational collaboration. Barriers include the termination of
significant binational initiatives (Oresund University and Oresund Science Region), the imbalance in
economic power between the two sides in their national contexts (stronger in Denmark), and relatively
weak national interest and support in each country for binational regional cooperation and innovation.
4.3 Helsinki-Tallinn (Finland-Estonia): The Binational Gulf of Finland Region
The capital cities of Helsinki, Finland and Tallin, Estonia (in the counties of Uusimaa and Harju)
face each other from opposite sides of the 40-mile wide Gulf of Finland at the eastern end of the Baltic
Sea. The two capitals are connected by a two-hour long ferry ride across the Gulf. Each capital
Oresund Bridge
Source: Fanpop.com

28
represents the majority of each nation’s population and GDP, respectively.38
Their location on the Gulf
of Finland is a key to a future logistics strategy to develop the region as an international port.
Figure 3:
Helsinki-Tallinn Binational Region
Source: Organization for Economic Cooperation and Development, 2013
The economies of the Helsinki and Tallinn areas are different. Finland is the more developed of the two
and joined the EU in 1995. Estonia, one of the three Baltic states that was behind the Soviet Iron Curtain
until it unraveled in 1989, joined the EU in 2004. Helsinki, with a population of 1.4 million, is nearly three
times larger than Tallin with a population of 500,000. In addition, GDP per capita in Tallinn is only 60%
of that in Helsinki and the unemployment rate of 9.6%39
in Tallinn is roughly 50% greater than the 6.3%
unemployment rate in Helsinki.40
These important economic differences create a dichotomized flow of
labor and spending between the nations. Finnish tourists and investors take advantage of the lower
prices in Tallinn and have high levels of investment and spending there. The high wages available in
Helsinki, often three times the wages in Tallinn, attract many Estonian workers across the border.41
Despite the asymmetries in economic production, there is an important complementarity between
industries in Helsinki and Tallinn. ICT is one of the largest economic sectors in Tallinn; indeed, the
country’s web usage is intensive with high levels of web accessibility. This ICT sector complements
Helsinki’s strong science and technology sector and creates a huge opportunity for innovation.
38
City of Helsinki Website. Retrieved January 15, 2013 from http://www.hel.fi/hki/helsinki/en/Information+on+Helsinki.
39
City of Tallin Website. Retrieved January 22, 2014 from http://www.tallinn.ee/eng/investor/Facts-about-Tallinn
40
City of Helsinki Website. Retrieved January 22, 2014 from http://www.hel.fi/hki/helsinki/en/Information+on+Helsinki.
41
Seppo Laakso and Eeva Kostiainen, “Economic Flows between Helsinki- Uusimaa and Tallinn-Harju regions.” H-TTransPlan
Final Conference. Retrieved January 15, 2013 from http://www.hel.fi/wps/wcm/connect/15e9d665-795c-4429-91c9-
af5abdb63d8e/Helsinki-Tallinna+talousvirrat.pdf?MOD=AJPERES&CACHEID=15e9d665-795c-4429-91c9-af5abdb63d8e

29
Binational regional cooperation has increased significantly since Estonia joined the EU and adopted the
Euro in 2011. The primary efforts of the governments of Finland and Estonia on binational collaboration
opportunities came from “Wise Men” reports in 2002 and 2007 that recommended a focus on the
development of cross -border research. The Helsinki-Tallinn twin-city science project echoes this
recommendation and also calls for collaboration between the universities to target foreign regions, such
as China and India.42
The Helsinki-Tallinn Euregio NPA, a non-profit association of several public authorities, provides
technical assistance but lacks the recognition of many leading public and private actors. Created in 1999
and funded by INTERREG, this association focuses on transport, infrastructure, university contacts, and
government, but the emphasis on IT and innovation is weak. The Euregio recently generated data on
cross-border flows of freight, goods, and people for the “H-T Transplan.” There is little active effort by
the private sector in binational regional collaboration, and besides the “Wise Men” reports, little
involvement by the national governments.
There are multiple key objectives in creating a stronger binational region. A preliminary goal is to
directly involve the national governments of Finland and Estonia to remove other obstacles to closer
collaboration. Another important step is to create a regional brand that will combine the strong Finnish
research sector with the Estonian web application culture. OECD reports that these cities are test beds
for medium-sized cities for advanced smart city applications.
4.4 Hedmark-Dalarna (Norway-Sweden): A Binational Rural EuroRegion
The rural counties of Hedmark (Norway) and Dalarna (Sweden) are located on the Norwegian-
Swedish border separated by a mountain range and distant from any major urban centers. The total
population of 500,000 people inhabit almost 23,000 square miles with an economic output of USD 22
billion.43
The region does feature relational (i.e., socio-cultural and linguistic) proximity.
42
Merle Krigul. “On possibilities to develop cross-border knowledge region: the case of Tallinn (Estonia) and Helsinki (Finland).
Problems and Perspectives in Management, Volume 9, Issue 1, 2011.
43
OECD. “The Case of Hedmark-Dalarna (Norway-Sweden) –Regions and Innovation: Collaborating Across Borders.” OECD
Publishing. 2013.

30
Figure 4:
Hedmark-Dalarna Binational Region
Collaboration in the tourism sector provides important economies of scale and forestry is another
common sector with rich potential for binational collaboration. Both of these sectors would be aided by
the construction of an airport that would serve both counties.
Small university colleges in the region do have an interest in forming partnerships with larger
universities that are located outside the area. The smaller colleges have used these relationships to
develop distance-learning joint activities that correlate strongly to the needs of the tourism industry.44
As most science and technology-related assets are located far from the border, the region does not
seem to have the relevant conditions for a broad cross-border regional innovation policy since urban
centers are perhaps better served by looking towards other locations rather than this border. On the
border, efforts for innovation and collaboration in other forms, such as in marketing, timber,
construction, education and organizational methods in tourism, are more relevant.
The Hedmark-Dalarna region has been experiencing more strength in the collaboration between the two
counties, largely in efforts to increase tourism at the border area, which is facilitated mainly by Skistar, a
Swedish firm that manages ski resorts in both counties. The region is also seeing cross-border
collaboration with the planned construction of a new airport that would bring a much needed boost to
the infrastructure of the region.45
44
Ibid.
45
Hedmark Dalarna Website. Retrieved January 21, 2013 from http://www.hedmarkdalarna.com/wp-
content/uploads/2013/05/Backgroundreport.pdf

31
Opportunities in the region include the growth of the Oslo region, 135 miles from Hedmark and 210
miles from Dalarna, and the unique global brand of tourism based on sports, health, and green assets.
In addition to their naturally-pristine areas, regional assets include relational proximity; knowledge and
support institutions oriented toward regional specializations; potential in forestry-related industries;
and an openness to cross-border cooperation.46
Given these significant strengths, closer binational
regional collaboration makes sense.
The weakness of the region in terms of cross-border collaboration potential is the lack of infrastructure;
minimal potential for joint activities at the border; imbalance in wage levels and currencies;
depopulation due to youth outmigration; and the high level of intense national and international
competition in the tourism industry.47
A major missing component that is essential for cross-border collaboration is private sector funding.
Private sector support has been nonexistent, especially with regard to funding while public sector
funding supports cross-border collaboration projects through the Nordic Council of Ministers and the
European Union.
At present, due especially to the fact that cooperation does not appear in the regional development
plans of either county, the region is not a prime candidate for strong binational regional collaboration.
4.5 The Bothnian Arc (Finland-Sweden): Deepening Northern EuroRegion Integration
The Bothnian Arc is formed by coastal areas in Sweden and Finland around the Gulf of Bothnia
at the north end of the Baltic Sea. It includes seven Swedish municipalities and five Finnish sub-regions
and one province.48
This region has a population of about 710,000 people, spanning nearly 55,000
square kilometers, with a GDP of $31 billion (USD).49
46
OECD. “The Case of Hedmark-Dalarna (Norway-Sweden) –Regions and Innovation: Collaborating Across Borders.” OECD
Publishing. 2013.
47
Ibid.
48
Bothnian Arc Website. Retrieved January 14, 2013 from http://www.bothnianarc.net/en/etusivu
49

32
Figure 5:
The Binational Bothnian Arc
The strategic location of the Arc at the confluence of the Baltic Sea and the Barents Sea Regions can be a
link and meeting place between these areas with the benefits of improving communications and
enabling social, cultural, and economic exchanges between the regions.50
The Nordic Council of Ministers provides funding support. Cross-border cooperation in the Bothnian Arc
will open up new opportunities to build a competitive region that sets high international standards in
technology, enterprise, tourism, and networking.51
Critical involvement by the mayors of Oulu and Lulea
(300 kilometers, or about 180 miles, apart) supports the regional collaboration.
Despite its peripheral location, Oulu (Finland) is driven by an innovative spirit that builds on the Nokia
heritage and the contributions of Oulu University. Lulea (Sweden) has recently attracted the European
Facebook data center which provides a concrete step in signaling the extent of its innovative
technological capabilities for housing tech giants. The region looks for a more strategic approach to go
beyond ad hoc projects, and uses binational collaboration in support of becoming the knowledge-
intensive hub of the north.52
The success of this collaboration represent a major step in the 21st
century
development of northern Europe.53
Challenges to binational regional collaboration, specifically between Oulu and Lulea, include the lack of
information on the potential of collaboration and insufficient involvement of private firms to develop a
50
Bothnian Arc Website. Retrieved January 14, 2013 from http://www.bothnianarc.net/en/etusivu
51
Ibid.
52
OECD 2013, op. cit.
53
Bothnian Arc Website, op. cit.

33
cross-border vision. The strengths of the region, however, emphasize strong innovation assets and
existing experimentation on joint projects to support a cross-border innovation agenda.
Future issues that might pose problems include the greater attractiveness of other national and
international locations for high-skilled talent and the declining relative competitiveness of its high-tech
sectors. However, these problems may be neutralized by the opportunities of increasing the
geostrategic importance of the location, given global warming and the advantage that could come from
developing an internationally-recognized brand in its technology hub in northern Europe.54
Success in cross-border collaboration will come from achieving three goals: one, collecting relevant data
to build on the two urban hubs and improve internal accessibility to realize the potential of cross-border
innovation; two, developing a shared vision and strategy for the Bothnian Arc area with greater
involvement of firms and knowledge institutions; and three, communicating more effectively about
cross-border area opportunities to support strategic programs and instruments.55
4.6 Ireland-Northern Ireland (UK) Collaboration: The Binational Emerald Connection
Ireland and Northern Ireland share the same emerald isle.56
With a total island population of 6.4
million, 4.6 million live in the Republic of Ireland and 1.8 million in Northern Ireland.57
The population is
concentrated in large cities with 527,000 or nearly 12%, of the Irish population residing in Dublin,58
and
281,000, or 16% of Northern Ireland, in Belfast59
.
54
OECD. “The Case of the Bothnian Arc (Finland-Sweden) –Regions and Innovation: Collaborating Across Borders” OECD
Publishing. 2013.
55
Ibid.
56
It is worth noting that long-standing conflict in Northern Ireland that had killed thousands was settled in 1998 by the Good
Friday Peace, or Belfast, Agreement. Political and religious roots of the conflict were centuries old. The modern conflict, the
Troubles, centered on opposing views of the status of Northern Ireland, with some in Northern Ireland, especially the mainly
Protestant Unionist community, believing it should remain a part of the United Kingdom. Others, particularly the mainly
Catholic Nationalist community, believed it should leave the UK and become part of the Republic of Ireland. The Agreement
provided that the union between Northern Ireland and the UK would remain in place as long as the majority of the people in
Northern Ireland wanted it and the North would be governed by a power-sharing arrangement with both the unionist and
nationalist sides. Unionists and Nationalists agreed to participate in the new assembly in Stormont Castle in Belfast. The 15
years of peace since have not been perfect but still represent a vast improvement over the previous decades.
57
Northern Ireland Website. Retrieved January 10, 2013 from http://www.northernireland.gov.uk/news-dfp-260613-northern-
ireland-population
58
Ireland Central Statistics Office Website. Retrieved January 10, 2013 from
http://www.cso.ie/en/statistics/population/populationofeachprovincecountyandcity2011/
59
City of Belfast Website. Retrieved January 10, 2013 from
http://www.belfastcity.gov.uk/business/investinginbelfast/belfastfacts.aspx

34
Figure 6:
Narrow border area of Ireland-Northern Ireland
Strictly speaking, Ireland and Northern Ireland are not an example of binational regional collaboration.
But the spatial dimensions are comparable to those of binational regions. This collaboration is actually
between two countries, the Republic of Ireland and Northern Ireland, the latter being one of four
countries that make up the United Kingdom. Typically of course, the binational regional collaboration
involves working with an immediate border region and not the entire country. In the case of Ireland and
Northern Ireland, however, the border region is considered an area with low potential for economic
development and innovation. It was more productive to consider the entire island, including the cities
of Dublin and Belfast, in a binational collaboration.
Ireland and Northern Ireland have very different economic structures. Ireland’s economy is essentially
two pronged: one, large multinational corporations (MNCs), and two, small and medium-sized
enterprises (SMEs). The Northern Ireland economy is dominated by the public sector. In addition, the
Irish economy with a richer history of foreign direct investment and research and development is
generally more robust than the Northern Ireland economy.
Most cross-border collaboration between Ireland and Northern Ireland is driven by government-funded
organizations, including InterTradeIreland and Innovation Vouchers. IntertradeIreland was co-funded by
the United Kingdom and the Republic of Ireland, and supports SMEs through research, business funding,
mentoring, and networking.60
InterTradeIreland leads the binational collaboration efforts on the island.
60
InterTradeIreland Website. Retrieved January 10, 2013 from http://www.intertradeireland.com/aboutus/whoweare/

35
Innovation Vouchers, a joint project between Invest Northern Ireland and Enterprise Ireland, connects
SMEs with researchers in the public sector and universities.
Collaboration between Ireland and Northern Ireland enjoys consistent funding, but that also presents
difficulties. Public programs often fail to meet business needs and they are of limited duration. In order
for collaboration to flourish and succeed, greater involvement from the private sector and universities is
necessary.
One of the greatest potentials for binational collaboration lies in the more than 100 research centers
supported by Ireland and Northern Ireland in ICT, life sciences, nanotechnology, agri-food, and
aerospace. To work together, information gaps across the border must be filled, and discrepancies in
laws regarding intellectual property must be resolved.
Private sector efforts in collaborative initiatives tend to be irregular and poorly-coordinated. To
maximize the potential for collaboration between Ireland and Northern Ireland, cooperation between
publicly-funded programs, universities, and private sector activities must increase.

36

37
5.0 North American Models of Binational Regional Collaboration
Binational regional collaboration in North America operates in an entirely different historical, political,
demographic, and socio-cultural context than in Europe. There is no overarching supranational
authority like the EC to guide and support it. Nor is there any history of devastating wars being fought
on North American soil in the 20th
century. Combat was not absent, however; the U.S. took armed
action on multiple occasions against Mexico during the Mexican Revolution of 1910. And instead of
some 30 mostly small countries as in Europe, there are only three countries with an acute asymmetry
between the populations and economies of the U.S. and Canada and the U.S. and Mexico. All three
countries are constitutional republics with free market economies.
The three countries are somewhat similar in terms of having extensive land areas with Canada the
largest at 3.855 million square miles, followed by the
U.S. at 3.71 million square miles and Mexico at 761,600
square miles. Canada has the largest land mass in the
North American hemisphere and is second only to China
in the world. The U.S. and Mexico are the third and 13th
largest in the world, respectively.
The population of the U.S. was 317,353,470 (as of January 2014);61
compared to Mexico with a
population of 117,410,00062
and Canada with a population of 35,158,300.63
Asymmetry between the
U.S. and its northern and southern neighbors is pronounced with the U.S. population nearly 10 times
greater than Canada’s and nearly three times Mexico’s.
The U.S. economy is about ten times bigger than either Canada or Mexico. The U.S. GDP of $15.7 trillion
in 2012 represented just over 25% of the world economy as reported by the World Bank Group. In
comparison, the Canadian GDP was $1.4 trillion (Canadian) and the Mexican GDP was $1.761 trillion in
2012.
At 5,525 miles, the U.S.-Canada border is the longest shared border in the world, with five geographic
regions: one, Pacific West Coast; two, Great Plains; three, Great Lakes; four, Quebec-New York State and
Northern New England; and five, Atlantic East Coast.
61
U.S. Census Bureau Popclock. Retrieved January 11, 2014 from http://www.census.gov/popclock/
62
World Population Statistics. Retrieved January 11, 2014 from http://www.worldpopulationstatistics.com/mexico-population-
2013/
63
Statistics Canada. Retrieved January 11, 2014 from http://www.statcan.gc.ca/daily-quotidien/130926/dq130926a-
eng.htm?HPA
“…cross-border regions represent a
new economic model that best meets
the challenge of competing in global
markets.”

38
The U.S.-Canadian relationship is exceptionally close:
Canada and the U.S. share a tradition of day-to-day cooperation and have
developed an ‘intimate’ knowledge of each other that is apparent in the current
tradition of quiet diplomacy and low-level functional solutions in a few key policy
areas (free trade, labor, and environmental standards).64
A key Canadian observer of cross-border regions, Senator Jerahmiel Grafstein, co-chair of the Canada-
U.S. InterParliamentary Group, noted that cross-border regions represent a new economic model that
best meets the challenge of competing in global markets.65
The results (of the collaborative research process) underscore the increasing importance of cross-border
regions and regional relationships to present-day Canada-U.S. relationships and to Canada’s future
growth and prosperity. This importance highlights the need for new ways of thinking about policies and
policy development, and, more than ever, shows that using a cross-border regional lens is necessary to
recognize, understand, and better respond to the rising cooperative links and increasing participation of
regional players and local stakeholders in the practical problem-solving of common issues in the border
areas of Canada and the U.S.66
The extensive and growing integration of the U.S., Mexico, and Canada economies since the North
American Free Trade Agreement (NAFTA) went into effect 20 years ago is a phenomenon that requires a
deeper understanding by regional leaders in taking advantage of new economic development
opportunities.
The U.S.- Canadian Auto Pact (1965), the U.S. Canadian Free Trade Agreement (1989), and the North
American Free Trade Agreement (1994) were the early milestones in an evolving strategy of connecting
to and competing in the global economy. These milestones have contributed to the integration of the
North American economy and greater global competitiveness. Multi-national corporations that helped
drive this global economic process have reaped substantial benefits. SMEs have opportunities to seize
these global economic opportunities through regional economic framework. Binational regions provide
especially rich opportunities.
While globalization has undermined the importance of nation-states, sub-state regions have become
more important. As places where cross-border commerce flows and communities live, sub-state/sub-
provincial actors are well positioned to offer important guidance on embracing new perspectives, seeing
themselves as part of the larger economic regions they inhabit rather than as isolated production and
commerce centers.
64
Regions.” Canadian Political Science Review Vol. 2. No 2. 109. 2008.
65
Government of Canada PRI. “The Emergence of Cross-Border Regions Between Canada and the United States” Final Report,
2008.
66
Ibid.

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