With an economic slump affecting both sides of the Canadian border, and despite a growing trade imbalance, the Quebec and New Hampshire chambers of commerce met in New Hampshire May 12 to formalize their cooperative efforts with the aim of remaining more competitive in international markets.

While the agreement doesn’t include the billion-dollar elephant sitting in the living room — the wood industry — the Business and Industry Association of New Hampshire and the Federation of Chambers of Commerce of Quebec forged the Quebec-New Hampshire Business Partnership, a document that sketches in broad terms the areas on which the business organizations hope to cooperate. The one specific item that featured in the agreement is to meet once a year and provide links on each other’s Web sites.

“New Hampshire’s major trade partner is Canada,” said Jim Roche, president of the BIA, which also is the state’s chamber of commerce. The agreement, he said, “preserves, enhances and explores” how to enhance the relationship.

“This is a way to get to know one another better,” said Roche’s counterpart, Francoise Betrand, chief executive of the FCCQ, who echoed repeated calls for New Hampshirites to come up and visit during Quebec City’s 400th birthday celebration.

Two government entities, the New Hampshire Department of Resources and Economic Development and the Quebec Ministry of Economic Development, Innovation and Exportation, also signed the document, which adopts the goal of “expansion of trade and trade relations between businesses.”

New Hampshire and Quebec have certainly had close ties throughout the years, as George Bald, the commissioner of DRED emphasized as he spoke in French, which he learned during his French-Canadian upbringing. There is particularly strong interest on the New Hampshire side of promoting Canadian tourism, especially in light of the decline of the American dollar. In the first three quarters of fiscal year 2007, 370,000 Canadians stayed in the Granite State overnight — an increase of 20 percent from 2006 – and they spent some $89 million. They spent some $89 million in all of 2006, and nearly half of the Canadian visitors came from Quebec.

Clearly, tourism was a concern for both sides, which cited their lobbying efforts to get the United States to accept an enhanced driver’s license, as opposed to a passport, to allow for continued relative ease in crossing the border. This may not solve the problem for New Hampshire, which is still balking at adopting the federal “Real ID” program.

Trade corridors

The flow of dollars encompasses more than tourism, and in goods and services, there is definitely a growing trade imbalance. Quebec exported $1.2 billion to New Hampshire (in Canadian dollars) in 2007, slightly more than double the amount it did in 2003, according to the state Division of Economic Development. During the same five-year period, New Hampshire imports to Quebec fell to $212 million — a 12.5 decline, though a slight uptick from 2006, when New Hampshire imports dipped below $200 million.

A major part of that imbalance comes from wood, with Canada buying up raw materials from New Hampshire loggers and shipping down finished products, bypassing many of the state’s sawmills. This has been a sticking point among mill owners who complain that it is hard to compete with Canada’s government-provided health care and cheap electricity generated by Hydro-Quebec.

“It cuts both ways,” said Jasen Stock, president of the New Hampshire Timberland Owners Association, who explained that loggers may appreciate the Canadian markets while mill owners “are living with the consequences of past trade deals.”

A U.S. tariff slapped on Canadian imports has slowed things down a bit, and now Canada is just one more concern in an increasingly competitive and globalized economy, Stock said. Indeed, both chambers emphasized that competition with Asia outweighed any competition with each other.

Stock wasn’t informed ahead of time of this latest trade partnership, but that could be because wood won’t be on the table, said Roche, who explained that the topic was more of a federal issue.

In any case, Quebec is seeking to expand its trade penetration into New England. New Hampshire will be the second state to formalize its relationship with the province. Vermont signed a similar deal two years ago. That is all part of FCCQ’s plan to create a New England trade corridor.

“We are hoping to do this all the way down to Connecticut,” said France Dionne, delegate general of the Quebec delegation, which is based in Boston.

The New England trade corridor will join the Quebec-New York and Quebec-Ontario-Midwest corridors.

“The FCCQ’s action plan for the next few years calls for a focus on energy and environment. Initiatives are underway with Gaz Metro, which serves part of New England, and others are being prepared with Hydro-Quebec,” according to a FCCQ fact sheet on the corridors.