From Neil Reynolds Globe and Mail Canada should come back to earth about cross-border shopping May 18, 2011
U.S. trade policy analyst Daniel Ikenson got it right a couple of years ago when he proposed a long-overdue revision of product origin labels. They should all read, he said, “Made on Earth,” to reflect the fact that almost nothing is manufactured in a single country any more. What good is it to calculate the dollar value of China’s exports, he said, when other countries account for more than half of it? Global economic integration, he said, has made national trade policy and national trade statistics obsolete…
Take one relatively minor – that is, relatively easy – border issue: the amount of goods that Canadians may bring back duty-free from cross-border shopping trips to the United States. Here is a simple way to show Canadians that integrated borders mean a more tangible economic relationship with the States. Yet, as The Globe and Mail reported last week, the federal government has told the U.S. that it will not increase these nuisance exemptions.
Earlier this year, former Canadian diplomat Colin Robertson proposed that the government increase these exemptions tenfold: raising the one-day allowance from $50 to $500 per person; the three-day allowance from $250 to $2,500; that longer-stay allowance from $750 to $7,500. For most Canadians, these higher allowances would eliminate the us-versus-them hassles of cross-border shopping – and permit customs agents to spend less time on “looking for bottles of duty-free whisky,” as a Senate report exhorted in a 2007 report, “and spend more time trying to identify people who might be a genuine threat.”
With largely integrated economies, the historic reasons for these anachronistic regulations between Canada and the U.S. no longer exist. Compared with the trade that crosses the border every day, the tax revenue extracted from shoppers is insignificant. Cross-border customs agents monitor a minor part of Canada-U.S. trade. It should be enough to know that these “Made on Earth” goods have been happily “Bought on Earth” as well…