Canada must push U.S. to ease border restrictions

by David Bradley

The saying that Canada moves by truck never rang more true than it does today, and nowhere is this more evident than with respect to trade.

More than 70 per cent of Canada’s trade with the U.S. is shipped by truck. That represents almost one-third of Canada’s gross domestic product. Each year, trucks cross the Canada/U.S. border more than 10 million times – that’s about one truck every three seconds, 24 hours a day, seven days a week, 365 days a year.

With much of this being trade in time-sensitive manufactured goods and component parts, any prospects of border disruptions are a serious concern for the Canadian trucking industry and the Canadian economy as a whole.

This is why, over the last few years, the Canadian Trucking Alliance (CTA) has made border issues a key priority, pushing for liberalized cabotage rules, the elimination of Section 110 of the U.S. Illegal Immigration Act and franchise taxes, and a greater automation of customs procedures.

The U.S. Customs Service’s 15-year old Automated Commercial System (ACS) is now running at close to 90 per cent of its designed capacity, plagued by overloading and brownouts. These potentially paralyzing shutdowns make the upgrading of this system a priority for trade.

In 1998, ACS experienced two system failures that lasted several hours and could have halted trade if they had lasted much longer. The system is now functioning thanks to a series of temporary patches and Band-Aids that the U.S. Customs Service installed last year.

But the mood in Washington these days is not conducive to discussing automated customs procedures, facilitating trade or easing border controls. A recent terrorist scare that had foreign nationals allegedly using Canada as a base for their activities in the U.S. has touched a nerve with election-bound politicians on Capitol Hill, and led to calls for a stronger enforcement presence on the northern border.

The Clinton administration quickly responded by announcing that it would deploy an additional 600 to 700 Customs officers along the Canada/U.S. border – a 30 per cent increase over current levels. At the same time, it also announced that it would stop funding NCAP, a Customs’ automation prototype that was to pave the way for its next-generation ACE customs system.

While the two events may not strictly be related, they do signal a troubling shift in policy away from facilitating trade and toward stronger enforcement.

This policy shift was consummated last month with the presentation of President Clinton’s fiscal year 2001 budget proposal. Buried deep in the administration’s budget blueprint is a reference to a US $210-million fee that would be paid by those who use U.S. Customs’ automated systems.

This user fee is a more expensive mirror image of a proposal in last year’s budget. And as was the case last year, this fee would pay for a much-needed upgrade of the U.S. Customs Service’s automated systems.

But last year, the administration’s proposal was met with virtually unanimous opposition. Strong criticism from the trade community gave it a rough ride in Congress, where it was eventually defeated last fall.

The CTA was among the first organizations to fight the proposal. Our argument (subsequently supported by the government of Canada) that this proposed tax on trade was illegal under Section 310 of NAFTA was instrumental in getting Congress to block it.

The Clinton administration’s decision to resurrect a proposal that has virtually no industry or political support is serious on its own. It becomes alarming in light of other recent developments.

These developments – the user fee, additional armed Customs officers, the end of NCAP funding, and Section 110 – indicate that the U.S. administration is not seriously committed to facilitating trade. On the contrary, these recent announcements would not only leave Canadian exporters and truckers to pay to trade, but they could lead to border chaos and traffic gridlock.

Trade between Canada and the U.S. is expected to double within five years to more than $600-billion a year. What we need is a strategic investment in smart highways, trade corridors and border crossings to cope with the growing traffic. Low-risk commercial traffic must be allowed to move across a seamless border with few disruptions.

We don’t need more armed guards and paperwork.

Canada is moving briskly in this direction. The U.S., on the other hand, is not only backtracking but has begun an outright retreat.

Our government has done a good job of promoting the virtues of liberalized trade in Canada. It needs to be ever-vigilant in defending the interests of Canada’s trade community in the face of U.S. protectionism.

Some officials in Ottawa believe that these recent developments are just election-year posturing. It would be a mistake to dismiss them. If we don’t want Mexican-style border controls to become part of the landscape on the northern border, if we want to avoid turning our busiest border crossings into Laredo-North, Canada’s trade community and the federal government must work together to address these issues. n

– David Bradley is chief executive officer of the Canadian Trucking Alliance, and president of the Ontario Trucking Association.

Have your say

This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.