Next US protectionism plan right ON TIME

WASHINGTON — Buy American or Buyer Beware? That’s what Canadian cross-border shippers, importers, and carriers might be asking themselves these days.

Still digesting the implications of the ‘Buy American’ provisions included in the colossal U.S. ‘stimulus’ package last month, foreign traders might soon have to deal with another seemingly quasi-protectionist rule that slaps a fee on every shipment that enters or leaves the U.S.

Proposed by California Republican Ken Calvert and Illinois Democrat Jesse Jackson Jr., the Our Nation’s Trade Infrastructure, Mobility and Efficiency Act (ON TIME) — yes, that’s its real name — would impose a "trade gateway corridor" fee on all goods.

The fees — to be paid by the shipper moving the cargo internationally — would be set at 0.075 percent of the declared market value per shipment, up to a maximum of $500. "One hundred percent" of the expected $5 billion a year in proceeds would go towards upgrading U.S. roads, bridges and port infrastructure along 300 frequently accessed trade corridors and ports of entry.

"The growth in international trade, particularly containerized trade, is placing pressure on the nation’s transportation network and influences traffic congestion in the areas surrounding the major United States-international gateways," the authors state in federal bill H.R.947.

Transport stakeholders have their fingers crossed
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They note that the increase of foreign freight as well as outgoing U.S. goods in recent years is overburdening U.S. transportation arteries, leading to 200 freight bottlenecks, which cost goods movers $8 trillion a year.

Despite certain characterizations from industry sectors, the authors insist the rule isn’t a protectionist measure. Instead, it would benefit domestic companies and their foreign trade partners by reducing transport costs associated with traffic congestion and shipping delays.

Projects eligible to receive funding from the fee revenue include, freeway expansion, grade separations, dedicated truck lanes, and publicly owned intermodal freight transfer facilities.

"Anyone stuck behind a rail crossing or crawling along our jammed freeways knows commuters … are severely impacted by the overwhelming volume of goods," states Rep. Calvert in a press release. "The same transportation problems we see in southern California are happening at key trade gateways across the country. This bill serves a dual purpose by expediting the movement of goods to increase the efficiency of trade corridors and by providing transportation funding to those local communities most impacted by trade."

In a recent interview with The Globe & Mail, Canadian Trucking Alliance President David Bradley admitted that ON TIME is the latest trade headache brought on by the Obama Administration — after eight years of "security paranoia" emanating from the Bush White House.

Bradley (who has noted in the past that redundant security and indifference to the thickening border is actually masked or backdoor mode of protectionism) is still holding out hope that the new regime is open to a "more practical approach" to managing the border.

If implemented, the value-based ratio for the trade corridor fee — capping out at $500 — would likely cause trucking groups like CTA and the American Trucking Associations to step up efforts to get approval for bigger tractor-trailer combinations, as extra carrying capacity for units hauling lower value goods might help mitigate some of the impact of such fees.

The bill has been sent to committee in the U.S. House of Representatives for further analysis. A majority of bills that reach this stage don’t get passed.

 


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