Border Security Chills Trade Relations

Border Security Chills Trade Relations
(CSCB)

The following was reported in December 17, 2007 edition of “globeandmail.com”.

Canada's trade relations with the United States are being hurt by U.S. protectionism and Washington's aggressive security bureaucracy, forces that are regularly erecting new obstacles to cross-border commerce, International Trade Minister David Emerson warns.

"I think the threat is that we will just continue this bottom up accumulation of little, border-impeding, border-thickening initiatives," he said in an interview.

"[It's] been disheartening for some years now, the degree to which protectionist forces in the U.S. – and now some of the rigid mindsets of the security establishment – are really starting to, I think, threaten the special relationship that used to be there."

He said he hears more and more "horror stories" of companies forced by border delays to warehouse costly inventory on either side of the Canada-U.S. border and "referring to it as a just-in-case supply chain rather than just-in-time."

He said the United States must act to stop this creeping "thickening" of the Canada-U.S. border.

"They have to, at a very high level, recommit, to the North American relationship and it has to be a ... top-down thing," Mr. Emerson said. "Somebody at the high level has to say it's time that this stopped."

Mr. Emerson said that while Canada's political relationship with the United States is the best it's been in 20 years, impediments to doing business with Americans are growing.

"It's a source of serious concern because Canada cannot afford – [and] frankly neither can the U.S. – to see cross-border supply chains start to be weakened."

He said the post-9/11 security approach among U.S. government departments has led to a raft of new border obstacles, fees and inspections.

"You get this absolute supremacy of security trumping everything ... You get the bureaucrats in the departments and they are all powerful and they don't feel they have to listen to compromise or alternative solutions. In a way it's a disease of institutional bureaucracy and excessive empowerment."

Mr. Emerson said it's troubling that U.S. military export rules are preventing Canadian defence and aerospace contractors from working for Washington in Canada, because U.S. prohibitions against sharing military data with citizens of about two dozen countries are denying work to staff with dual nationalities based in this country.

"Private companies are in some cases finding they have no choice but to produce on the U.S. side of the border."

Canada this year failed to prevent Washington from imposing controversial new border taxes and inspections on trucks and railway cars. Also, this spring, talks collapsed on a pilot project to conduct customs inspections well before the border, following a dispute over whether U.S. authorities could fingerprint individuals on Canadian soil.

Mr. Emerson said the 2004 Security and Prosperity Partnership agreement – which is supposed to deepen economic relations between Canada and the United States by removing irritants – has helped a bit.

"But as long as the ... [U.S.] bureaucracy is out there creating new problems almost monthly, you've got to stop the overall erosion," he said.

David Wilkins, the U.S. ambassador to Canada, is far more optimistic about the state of bilateral trade relations and suggested security problems are being ironed out.

"I think the headlines should be reading: 'U.S. and Canada trade $1.6-billion of trade and commerce today without any security incidents.' We don't talk about the good news," Mr. Wilkins said.

More costs, more delays

March, 2007: Less than six months after a softwood lumber truce is signed by Canada and the United States, Washington disrupts the peace by formally complaining over allegedly unfair conduct by Ottawa and the Canadian provinces, launching arbitration that could impose more costs on this country's timber producers.

April, 2007: Talks collapse between Washington and Ottawa on a pilot project to conduct customs inspections well before reaching the border, following a dispute over whether U.S. authorities could fingerprint individuals on Canadian soil even if they didn't cross the border.

June, 2007: Washington plows ahead with controversial new border taxes and inspections for trucks and railway cars from Canada – part of a rash of new levies that will extract more than $75-million (U.S.) a year.

June, 2007: A Conference Board of Canada report says the harsh security crackdown at the Canada-U.S. border since 9/11 has forced exporters in key industries to abandon just-in-time delivery and return to the outdated practice of stockpiling goods.

Summer, 2007: Border crossing wait times worsen, according to some observers. Stan Korosec, vice-president of operations of the Blue Water Bridge, which links Sarnia, Ont., and Port Huron, Mich., calls 2007 the "summer from hell," saying he saw some of the longest waits since 2001, adding that U.S. border guards are asking more questions and sending more trucks to secondary inspection.

November, 2007: Anti-terror security measures put in place by the U.S. and Canadian governments since 9/11 have burdened Canada's transportation industry with up to half-a-billion dollars in extra costs, a Transport Canada report says.