The 8-11 Effect: Get the Border Right

 

Why it’s so important for Trudeau to fix the Canada-U.S. border

Colin Robertson The Globe and Mail Tuesday, Sep. 13, 2016

Call it the 9/11 effect. Fifteen years on we are still paying the price of that tragic day. It changed how we trade. Tourism to Canada by Americans has never recovered. It also altered, probably permanently, the easy trust that characterized what was once the “longest undefended border.”

The trade effect with the United States is the most evident. A smart and secure border must be the Trudeau government’s priority with the next administration.

Notwithstanding a series of initiatives – Smart Border, Security and Prosperity, and now Beyond the Border, the border has thickened. While rail shipments have increased, especially for oil in the absence of new pipelines, trucks remain the primary mode of cross-border transport although truck traffic is down almost 20 per cent since 9/11.

A study by Statistics Canada (2015) concluded that the premium paid to move goods across the border rose, from 0.3 per cent of the value of goods shipped prior to 9/11, to about 0.6 per cent after 9/11 because of inspection and a surge in paperwork required for passage.

Verification programs for “secured” carriers and goods and regulatory co-operation have mitigated border delays. But we are still awaiting the promised single electronic portal that will satisfy the information requirements of governments and their agencies.

The Nexus card, held by over one million Canadians, has become the fast pass with special lanes at the land border and at airports. It is smart security. Finding the baddies is like looking for a needle in a haystack. You shrink the size of the haystack through advance screening.

The “trusted traveller” formula is now being applied to employers because so much of our trade is intrafirm, including servicing, or moving goods as part of supply chain manufacturing, especially in the auto industry.

We still have work to do.

Both the U.S. Congress and our Parliament have yet to pass the enabling legislation for preclearance, benefiting travellers at Billy Bishop and Jean Lesage airports and those travelling south by train from Montreal and Vancouver. We also need to implement the long-promised Entry/Exit system that will give us an accurate portrait of who is coming and going within North America.

Tourism from the U.S. has not recovered: it is just over half of what it was in 2000.

We need to do a lot more to aggressively promote travel to Canada in the U.S., starting with the estimated 38 million Americans living within a two hour drive of the border. We are safe, we are close, and the U.S. dollar enjoys a 30-cent premium.

Part of the problem is the requirement for a passport. Only 38 per cent of Americans, compared to 70 per cent of Canadians, hold passports. Provincial governments should work with border states to make the smart drivers licenses, that also allow land border transit, the default option.

Canadians, meanwhile, continue to flock south. We spend over 238 million nights a year in the U.S.: over 8 million nights in Las Vegas and 91 million nights in Florida. And even with our drooping loonie, it is estimated that this year Canadians will spend $20.5-billion in the U.S., with Americans spending $9.5-billion in Canada.

The trust issue requires constant effort by Canadian leadership.

The 9/11 Commission worried about lax Canadian immigration standards. This was fixed by the Harper government. But still there is suspicion that Canada is the broken back door. In February, the Senate Homeland Security committee held hearings on Canada’s decision to take in the Syrian refugees to be sure we were not taking any “shortcuts.”

Americans feel more vulnerable, ranking terrorism second only to the economy and ahead of health care, according to a recent Pew survey.

Even while President Barack Obama was making his first official trip to Canada in February, 2009, drones began patrolling our shared border. Wisconsin Governor Scott Walker mused last year, while seeking the Republican nomination, about building a wall with Canada. A subsequent Bloomberg poll revealed that 41 per cent of Americans agreed with this idea.

The 9/11 effect has changed how Americans view the world and manage their borders. There is still too much emphasis on enforcement and not enough on expediting legitimate travel. If we have learned anything from 9/11 it is that the answer is not more guns, guards and gates but rather smart screening and risk management.

In our daily dealings with the U.S. we need to remind them that our shared economic prosperity is predicated on the ability to trade goods and services. But because Americans put a premium on security, Canadians need to constantly reassure them and visibly demonstrate that we have their back.

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Unfinished Business: Canada-US Border and Regulatory Cooperation

Excerpted from Inside Policy February-March 2013 MacDonald Laurier Institute

Launched a year ago the Regulatory Cooperation and Beyond the Border Initiatives are making progress even if they are not generating headlines. The re-election of the Obama Administration, with its commitment to create jobs through doubling trade, offers the promise of more to come.  It is easier for people and goods to cross the border and we should see more improvements. While the regulatory thicket remains, its growth is curbed and, in time, we may even see some trimming of the ‘tyranny of small differences’ that frustrates business and undermines North American competitiveness. While process is often a placebo for real progress, in these initiatives process is progress but for it to take hold we need to see attitudinal change on the part of those who mind the border…

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Beyond the Border and Regulatory Cooperation A Year On

Beyond the Border, 2013: inching toward a deal iPolitics Insight

By | Dec 12, 2012 9:01 pm

It’s been a year since Prime Minister Stephen Harper and President Barack Obama announced framework agreements on Beyond the Border and the new Regulatory Cooperation Council. While most of the subsequent work has been below the waterline of media interest, let’s look at the progress to date.

Access to the United States market — still the largest in the world and, for Canadians, the most accessible — is an enduring Canadian objective dating back to when we were British North America. A European-style union is not in the cards but a more integrated continental economy, one which includes Mexico, makes a whole lot of sense.

Access to the U.S. has been the trade priority of every Canadian prime minister. Our domestic market is too small to generate the sales we need to put bread on the table and pay for those things, such as medicare, which define what it is to be Canadian.

Defence production led the way under Mackenzie King and Roosevelt. It was followed by the Auto Pact (Pearson and LBJ), the Canada-U.S. Free Trade Agreement (Mulroney and Reagan) and NAFTA (which transitioned from Mulroney/George H.W. Bush to Chretien/Clinton). Some relief from the security curtain imposed after 9-11 was provided by the Manley-Ridge ‘Smart Border Accord’ but the border continued to thicken. The Security and Prosperity Partnership — started by George W. Bush, Paul Martin and Mexico’s Vicente Fox — came to naught.

Mr. Harper had the border on the agenda when Mr. Obama came to Ottawa just after his first inauguration but the issue lost traction. The prime minister had to personally put it back on the president’s agenda – another vindication of Brian Mulroney’s axiom: “If you don’t have a friendly and constructive personal relationship with the president of the United States, nothing is going to happen.”

It is estimated border inefficiencies cost the Canadian economy 1 per cent of GDP, or $16 billion a year — roughly $500 for each Canadian.

So what do our two nations have to show for their efforts a year on, besides some frequent flyer points for civil servants doing the capital shuffle (and not a lot of those, given the bite of austerity)? Three areas stand out: getting goods across the border, easing border congestion, and the process itself.

Supply chain dynamics increasingly account for most of our trade in things like trains, planes and automobiles, soup, and the ubiquitous BlackBerry. Just-in-time delivery is especially critical for the auto trade, still our biggest traded manufacture.

Getting stuff efficiently and quickly across the border is vital for manufacturers. Global production means that more and more of our parts come from Asian workshops. The port closest to those suppliers is Prince Rupert, B.C., where containers are put on trains and shipped south, passing through Portal, Sask., enroute to the industrial hub around Chicago.

Rail cars crossing the border have long been screened for illegal migrants as well as chemical or radiological content — but they’ve still been subject to secondary inspection. Southbound, rail is now handling about 60 per cent of the surface volume (trucks carry the other 40 per cent). Containers arriving at U.S. ports still avoid this kind of rigorous inspection.

Now, joint inspections in Prince Rupert allow faster transit — giving real effect to the principle ‘inspected once, approved twice’. Montreal likely will be the next pilot port for this fast-tracked inspection service, with Halifax and Vancouver to follow. The value of integrated gateways was demonstrated recently when Hurricane Sandy obliged the diversion of cargo to Halifax from East Coast U.S. ports. Halifax was able to double its intake and, between re-transit by sea and more rail cars for land travel, the containers reached their southern destinations with minimal disruption.

For the frequent traveller there are now designated NEXUS lines at most major airports giving ‘fast-pass’ cardholders one less travel headache.

The challenge will be to preserve the pre-clearance facilities at Canadian airports as the fiscal crunch bears down on U.S. departments. Unlike other foreigners, we can remind the Americans that Canadians continue to flock south of the border to spend their money, making more than 21 million visits to the U.S. last year (including 59,619 nights in Florida).

Canadians represent more than a third of all foreign visits to the U.S. Canadians’ annual spending in the U.S. — $24 billion in 2011 — dwarfs the sum spent by Americans stationed in Canada.

We are also beginning to make the border more accessible by constructing new lanes and building facilities designed for easier flow in places like St. Stephen, N.B., and Calais, Maine.

Despite recent blocking efforts, it appears the vital second crossing between Windsor and Detroit is back on track. The trade that crosses the Ambassador Bridge is worth more than all U.S. trade with Japan. National security alone would argue for presidential approval of the necessary waiver and a quick start to bridge construction, which will create thousands of jobs.

The bureaucratic process set in place by the initiatives — especially on the regulatory side — is very promising. Here the Americans are ahead of us. A pair of Executive Orders (the equivalent of cabinet directives) oblige U.S. regulators to demonstrate why they would diverge from complementarity in new regulations with regulatory partners like Canada.

Working groups across the current designated areas are using a sensible schematic in looking at new rules:

  • Is it really required?
  • Is there another way to address the requirement (i.e., data sharing)?
  • For those deemed necessary, can administrative burdens be reduced or eliminated?

There is also a process to re-examine old rules and bring them into line with the new approach. The best net effect would be a change in attitude among those who administer the rules. The current enforcement mentality should evolve into one of common sense and risk-management aimed at expediting people and goods. This alone would be a very positive outcome.

A shrewd Canadian ‘ask’ was for an inventory of border fees and charges. As the U.S. approaches its ‘fiscal cliff’, it’s almost certain that there will be an effort to find alternate revenue sources such as the $5.50 fee levied last October on Canadians entering the U.S. by air or sea as ‘compensation’ for revenue lost under the U.S.-Colombia Free Trade Agreement. We need to be vigilant about new border fees.

After nearly seven years in office, Prime Minister Harper has got to be thinking of his legacy. Beyond the Border and regulatory cooperation would be an historic achievement.

But President Obama also needs this deal. He has pledged to double American exports. The twin initiatives with Canada, America’s biggest trading partner, will advance that goal but it will require continued attention from the president to make it happen.

At a time when questions are being asked about the direction of American policy, the ability of the U.S. to deliver on a deal with Canada will not be lost on officials in Mexico City, the partners in the Trans Pacific Partnership and friends and allies everywhere.

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Beyond the Border: Noise and Promise

Beyond the Border: noise and promise from Globe and Mail Dec. 05, 2011

On Wednesday, Prime Minister Stephen Harper and President Barack Obama will announce a framework agreement on their Beyond the Border initiative with “risk management” as its guiding principle.

The deal is likely to include the following: Pre-clearance, currently offered at our major airports, will be extended to cargo leaving the factory gate; thresholds for inspected goods will be more generous; the “fast pass” privileges for trusted travelers will be expanded; access roads and ports will be improved to make them gateways rather than chokepoints; electrical grids, oil and gas pipelines, and the circuitry for everything from ATM transactions to air traffic control will be reinforced against cyber threats.

There will be reforms aimed at greater regulatory compatibility because differing national “standards” are the new barrier to commerce. They range from baby food bottles to seat belts to the Cheerios that U.S. Ambassador David Jacobson eats for breakfast.

Inevitably, there will be complaints about a loss of “sovereignty.” But the reality is that we are leagues away from a European-style common market or common currency. We maintain separate immigration regimes while sharing data on cross-border flow in people. Privacy is a legitimate concern, but there’s probably more self-inflicted embarrassment on Facebook sites than can be gleaned from government.

The new deal would be a substantive advance on the Smart Border accord, quickly and cleverly cobbled together in the wake of 9/11. The test will be in the pilots and practical implementation to improve supply-chain security and efficiency by moving inspection to the perimeter. An attitudinal change on the part of border staff will be essential to expedite the flow of people and goods. Early results must include faster passage through the border and, for business, less red tape. If implemented as envisioned, the deal holds out the promise of transformational progress.

But there’ll bumps on the road.

The stalled second crossing at Detroit-Windsor and the debate around the Keystone XL pipeline are a reminder of how special interests in the U.S. system can thwart the common good. Uncle Sam is broke and the American allergy to taxation means they’ll continue to look elsewhere for revenue, thus the new fee on air and sea travellers. The IRS “granny hunt” for tax scofflaws, a port tariff, and the Buy America provisions within Mr. Obama’s jobs bill corrode our confidence in Uncle Sam’s ability to negotiate in good faith.

Much of this is noise. Unlike our Westminster system, most American legislative proposals wither on the congressional vine. We need to better understand the U.S. system, so we aren’t constantly sounding the alarm bell without cause.

Past deals, including the Canada-U.S. free-trade agreement and the North American free-trade agreement, mostly shield us from U.S. protectionism, but they must be constantly reinforced. The fractious nature of the American system means a permanent campaign on behalf of Canadian interests. Those who worry about putting our eggs in one basket should recall that we have 50-plus trade negotiations under way globally. A deal with the European Union is imminent, and the invitation to the Trans-Pacific Partnership is promising. But the U.S. remains the world’s biggest market.

A majority government and support from the premiers, a sea change since the 1988 free-trade election, ensure that we can meet our obligations.

The American picture is more clouded. Some will object to “giving” Canada a special deal, forgetting that the supply-chain dynamic creates jobs. Others will be reluctant to lower the drawbridge at the border, but U.S. border czar Alan Bersin got it right, saying the “old dichotomy between the promotion of trade and heightening of security … is a false choice.”

Bureaucratic resistance to change will be reinforced by the inertia that descends on Washington during a presidential election year. The Canada-U.S. Partnership inaugurated by Bill Clinton and Jean Chrétien in 1999 evaporated into the bureaucratic ether. The trilateral Security and Prosperity Partnership launched by George W. Bush, Paul Martin and Vicente Fox in 2005 turned into a zombie.

It took Ronald Reagan’s personal intervention to conclude the FTA in 1988. Will Mr. Obama demonstrate that same commitment in implementing the new deal?

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Could time be running out on the Canada-U.S. perimeter deal

Excerpted from Lawrence Martin ‘Could time be running out on the Canada-U.S. perimeter deal’ an ipolitics insight, October 20, 2011

A while back the Canada-U.S. perimeter accord looked like a done deal. Officials leaked word that President Barack Obama would come to Ottawa to sign a framework agreement on the border plan, one which would ease passage for goods, services and people.

But now there are doubts. Officials are holding out the possibility that owing to U.S. election year politics and other snags like the Buy-American issue, the deal could fall by the wayside.

The U.S. election primaries begin in January. “Election year. That`s the danger in this — that it gets spiked simply because time runs out,” said Canada-U.S. specialist Colin Robertson who is in touch with negotiators. “Once you get into the primaries then it`s really hard to get anybody`s attention.”

Robertson expressed optimism that the deal will make it. “I still think there is the time, if there`s the will.” Another official said the chances were about 50-50.

Protectionist measures like the Buy-American provisions in the president`s economic stimulus package aren`t making the finalizing of a border accord any easier. Yesterday top representatives of the respective governments were in open disagreement over the measures.

In a speech in Ottawa, U.S. ambassador David Jacobson said that the Buy-American provisions would not heavily impact Canada. But he was quickly rebutted by Trade Minister Ed Fast. Citing a previous Washington attempt at introducing Buy American regulations, Fast bluntly responded that “trade-restrictive measures between our two countries were recognized as wrong then. And they remain wrong now.”

A show of public discord of this kind isn`t normally the type of diplomacy that heralds the signing of a major bilateral agreement.
Officials now say it is highly unlikely that President Obama will come to Ottawa for a signing. They are hoping that the president will have Stephen Harper to the Oval Office for the ceremony.

A framework perimeter accord between the two sides has essentially been agreed upon. There are only some details to be worked out. If the two leaders sign it, then a round of consultations with provinces, states and other stakeholders need take place before the final accord is set. That could take months as some of the measures in the pact have to be approved by Congress. The election, which could see the Obama administration defeated, takes place next November.

Canadian provinces have signaled they are on board with the agreement as has the business community which also wants improvements on border access. But the framework agreement could contain security provisions on sharing of personal information between the two countries that could prompt opposition based on sovereignty concerns.

Initially the U.S. side wanted the deal to be worked out and signed by Homeland Security Secretary Janet Napolitano and her Ottawa counterpart, the public safety minister. But Ottawa rejected that plan, saying it would have too much the look of a security pact. Robertson said that for the deal to get approval in the U.S. it has to have the imprimatur of the president and the prime minister.

On election year timing, he recalled that a Canada-U.S. partnership accord fell by the wayside in 1999 owing to the 2000 campaign. On the other hand he said that the free trade agreement got approved in 1988, the year that Ronald Reagan ended his presidency.

A problem now, Robertson noted, is that Obama has an even bigger load of crises on his desk than in normal times. In such an atmosphere it’s hard for a Canadian concern – it’s Harper who initially pushed for the border accord – to make it to the top of the pile.

For Canadian leaders, it’s a problem with a long history. One day back in the 1950s, Lester Pearson, then external affairs minister, visited Dwight Eisenhower, the golfing president, at the White House. Pearson raised what he considered a pressing bilateral issue. Ike clearly didn’t know what he was talking about. On the way out an irked Pearson muttered to an aide, “you’d think his caddie would have mentioned it to him.”

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Perimeter Security, Immigration and Beyond the Borders

CPAC’s Prime Time host Peter van Dusen interviews Former Canadian diplomat Colin Robertson, a vice-president with the Canadian Defence and Foreign Affairs Institute, and Edward Alden, a senior fellow with the Council on Foreign Relations, discuss the Canada-U.S. perimeter security negotiations, immigration and refugee policy, the challenges to a deal, and the possibility of an imminent announcement.

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In Praise of the Hidden Wiring

Canada-U.S. relations: In praise of the ‘hidden wiring’

By Colin Robertson, Special to The Vancouver Sun July 20, 2011 (also in the Ottawa Citizen, July 22 as ‘U.S. relations much more than Obama, Harper’
Washington Governor Christine Gregoire (left) and then-B.C. Premier Gordon Campbell, pictured last October, exemplified the merits of inter-governmental ‘hidden wiring’ when they cooperated on the smart driver’s licence for easier passage across the border. Photograph by: Lyle Stafford, Reuters files
Words and deeds of prime ministers and presidents dominate the headlines in international affairs. But in the world of Canada-US relations, where the relationship is as much domestic as international, it is the “hidden wiring” of premiers and governors and legislators that merits more attention. Their behind-the-headlines efforts are where a great deal of problem-solving gets done.
Take the smart driver’s licence. It was the brainchild of former British Columbia Premier Gordon Campbell and Washington Governor Christine Gregoire who recognized that requiring a passport was an expensive and time-consuming obstacle for those who wanted to attend the 2010 Olympics. Championed by the Pacific Northwest Economic Region (PNWER), especially the legislators that make up the partnership of the ten states, provinces and territories, their efforts persuaded the Department of Homeland Security to accept the new license containing an embedded RFID chip. Now it is available in most border states and provinces, although we need to do more to promote its use.
The asymmetries of the relationship — the US market provides half of our GDP — means that Canadians usually have to take the initiative with the US. Fortunately, we’ve created a series of fora where leaders and legislators at the state, provincial and territorial level get together to discuss and resolve shared challenges.
Earlier this month New England governors met with Atlantic premiers in Halifax, something they have done since 1978, pioneering agreements on acid rain and the development of ‘smart’ energy. The Compact (2005) between the Great Lakes and St. Lawrence basin governors and premiers provides for ongoing stewardship of these waters and prevents any diversion. Western governors and premiers have long attended each others’ summer sessions and over the barbecue pit they’ve dealt with everything from wildlife to water and helped make progress on the Canamex corridor and the Hydrogen Highway.The provinces have embedded themselves as affiliates into the Council of State Governments that meet regularly in their regional fora. This week legislators from Ontario, Manitoba, Saskatchewan and Alberta met with their Midwest state counterparts in Indianapolis and adopted resolutions in support of Beyond-the-Border and endorsing for air travel the smart drivers license that is now accepted for land and marine travel. It’s practical problem-solving at the grass roots level.
Much of the work is informational — few Americans appreciate the importance of Canadian hydro-power or the oil and gas that flows through our pipelines. Americans are surprised when told their biggest market is Canada and that their trade with Canada continues to outpace, by a wide margin, that with the EU, China or India. Legislator-to-legislator these are vital word-of-mouth conversations that serve Canadian interests.
Cultivating relationships with governors and state legislators is also smart for the longer term. Eight years ago, Barack Obama, was a state senator from Illinois. Four of the last six presidents — Carter, Reagan, Clinton and George W. Bush — served as governors.
The premiers meet this week in Vancouver and the United States relationship is a standing item on the Council of the Federation agenda. Both U.S. Ambassador Jacobson and Canadian Ambassador (and former Premier) Doer will be there. Their efforts in tandem with those of the premiers and governors made the difference in securing easy passage of the 2010 reciprocity agreement on procurement.
Now we need to get Americans enthused and committed to the Beyond-the-Border and the regulatory initiatives launched by Prime Minister Harper and President Obama. The Canadian business community is engaging their American counterparts but success requires ‘all hands’, especially at the state and local level. Our message is simple: supply chain dynamics is what creates jobs and revenue and keeps us globally competitive. Business gets it, but the politics of local and special interests are a powerful countervailing force to mutual benefits of deepening integration.
A priority for the premiers should be to persuade governors to institutionalize the Canada-US agenda within the National Governors’ Association (NGA) meetings, as legislators are doing through the councils of state governments. If the premiers could get the NGA to make the Canadian relationship a standing agenda item at its annual summer meeting, it would be a big step forward. Regularizing the dialogue is how we ‘level the playing field’.
Another way to look at the Canada-US relationship is through the prism of the 64 states, provinces and territories that make up our two federations. The people-to-people relationships, and the mutually dependent jobs — 11 million in Canada and another 8 million in the US – have always outpaced the politics. Since 9-11, the political level has been playing catch-up. The collective work of the “hidden wiring” — premiers and governors, state, provincial and territorial legislators — is advancing our shared interests.

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