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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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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