19 February 2009

How a 'thickening' border is costing Canadians jobs

The following is excerpted from the 19 February 2009 edition of "globeandmail.com".

The Obama administration is poised to further "thicken" the Canada-U.S. border with regulations and controls, Canadian experts fear.

They say American measures, which have the stated goal of fighting terrorism, are already costing Canadians jobs and trade, and that more initiatives may be coming.

On the eve of President Barack Obama's first international trip, ex-diplomats and industry experts say the U.S. rollout of security plans has, by accident or design, effectively resulted in the return of trade protectionism. Successive layers of security more closely resemble tariffs, they argue, than strictly necessary controls.

"The tax is not just in terms of the fees we pay when we cross the border," said David Bradley, president of the Ontario Trucking Alliance. Canadian companies have dug deep into their profits just to comply with a growing "alphabet soup of programs" south of the border, he said.

Jacking up the relative cost of doing business has sent an obvious - and wrong - message to Canadian-based companies, he said. "Having problems at the border?" he asked rhetorically. "Establish your business in the United States."..

As an envoy from 2005-2006, Mr. McKenna frequently tried to disabuse American officials of the notion that the 9/11 hijackers entered the United States from Canada. Now that the continent is mired in a recession, he said it's crucial for Canadian officials to keep dispelling myths that this country is a safe haven for terrorists.

It's equally urgent that U.S. officials resist the temptation to build up unnecessary barriers, he said. "At a time of scarce resources, it strikes me that this is not a good use of money, thickening the northern border."

Experts point out that the North American economy is so integrated, particularly in the flagging automotive sector, that a single piston can cross the border four times as a car is put together. Inspections, delays and security controls add to the cost of production, arguably placing North American companies at a relative disadvantage when they can least afford it.

While less hawkish than its predecessor, the Democratic Obama administration is continuing the slow rollout of Republican security initiatives. Just this week, the Department of Homeland Security deployed unmanned drone planes - which cost $15-million (U.S.) apiece - to monitor the Canada-U.S. border.

A litany of new practices are in place and the Obama administration may be planning more. Homeland Security Secretary Janet Napolitano, formerly the governor of Arizona, received a secret Canadian action plan this week, after she asked her top officials to brief her on how to shore up the United States against terrorist threats from the north.

The Canadian Chamber of Commerce released a report last year documenting how a complex array of U.S. trade and security programs - C-TPAT, PIP, NEXUS, PASS - have failed to secure the free flow of commodities and in, many cases, have impeded them. A glaring irritant is a 2006 U.S. program known as APHIS, which forces Canadian trucks to pay a food-inspection fee every time they cross the border, regardless of whether they are hauling food...

"What we have done is replace the tariff costs with compliance costs for security. ... We've essentially offset the gains that we got." [said Perrin Beatty, president of the Canadian Chamber of Commerce,]

Officials interviewed for this article stressed that no one should dismiss the terrorist threat to North America nor question the sovereign right of the United States to guard its borders. But they urged that measures be restricted t