I do believe North America is the area where we're going to have the greatest productivity gains. Although we do have the NAFTA, there are still several non-tariff areas that need to be addressed, and one is regulatory harmonization. We're dealing with the U.S., but all of our small businesses that are trying to access the U.S. market are having to deal with so many barriers.
The question is whether we want to go after regulatory harmonization with the U.S. The issue is whether the U.S. is going to be willing to negotiate with us. Or is this something wherein we're just going to have to adopt the U.S. system? It looks as though there may be room for negotiation, but basically we're going to have to adopt the American system. The question then is what the effect of that will be on the Canadian economy.
There are several other barriers, but I think that's the most important one, and I think we do have to look to the North American market for our productivity gains. That's where all of our trade is and that's where our businesses function. We can set up deals with other countries, but really businesses themselves are going to dictate where they function, and they've shown that by operating within the North American market for the most part.
I think this is the area where we have to make it easier for companies to function. Doing so is also going to affect the transference of technology, but small Canadian firms grow in productivity faster, so I think this is what we need to focus on.