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U.S. Increasing Cross-Border Fees for Some Shipments

WASHINGTON, D.C. - The U.S. Department of Agriculture's (USDA) Animal and Plant Health Inspection Service (APHIS) announced it will publish its final rule on Oct. 29 that adjusts the fees the U.S. government charges to recoup the costs of conducting agricultural quarantine inspections (AQI) at U.S. ports of entry for all modes of transportation and many in Canadian trucking are speaking out against the move.


WASHINGTON, D.C. – The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) announced it will publish its final rule on Oct. 29 that adjusts the fees the U.S. government charges to recoup the costs of conducting agricultural quarantine inspections (AQI) at U.S. ports of entry for all modes of transportation and many in Canadian trucking are speaking out against the move.

According to the Ontario Trucking Association (OTA), the changes take effect on Dec. 28. In the case of trucking, the fees are applied whether or not a truck crossing the border is carrying agricultural products.

The USDA argues the fee adjustment, which it says was subject to an evaluation by “a well-respected” accounting firm, is necessary to align the actual cost of providing the services with what the U.S. government charges.

In making its announcement, the USDA also said the “AQI fee adjustments are consistent with the United States’ international trade obligations” despite concerns to the contrary from both the Canadian Trucking Alliance (CTA) and the Canadian government.

When it was first published in April 2014, the rule proposed to increase the annual APHIS fee by 205 percent per truck entering the U.S. from Canada with transponders and up 52 percent more for trucks without transponders.

The agency then took public comments and held several stakeholder meetings and listening sessions, which CTA participated in on its own and as part of a U.S. business coalition. The final rule was then held up for several months while it was reviewed by the White House.

The USDA says APHIS “carefully considered all of the public input it received on the proposed rule, and adjusted the final fees in response.”

As a result, certain fees have been lowered from what was proposed in April 2014. Commercial truck fees for trucks crossing the border without a transponder will now be increased to US$7.55, from the current level of US$5.25, compared to the April 2014 proposal of US$8 per crossing. For trucks using transponders the annual fee will rise from US$105 to US$301.67, compared to the initial proposed fee of US$320 per transponder.

Canada Says Hold the Phone

The adjustments to the APHIS fee increases are of little consolation to the trucking industry, according to the president and CEO of the Canadian Trucking Alliance, a federation of the provincial trucking associations representing over 4,500 trucking companies.

“This is a cash grab and a tax on trade,” said David Bradley. “We’re still looking at increases of 44 percent for non-transponder trucks and 187 percent for trucks with transponders. That is absurd and a complete contradiction of the principles of the U.S.-Canada Beyond the Border Accord.”

APHIS fees only started being applied to Canadian shipments to the U.S. in 2007.

“The fees were grudgingly tolerated by the trade community, although we always found it incredible that all trucks were being assessed the fees whether or not they were being inspected and whether or not they were carrying agricultural products,” said Bradley.

The top five commodities imported into the United States by truck are vehicles, computers, plastics, electronics, metals and stone.

Bradley pointed out that when the “nonsensical” fee increases were proposed last year, CTA obtained a legal opinion that was supported by the Government of Canada.

It found the very existence of the fees is inconsistent with the United States’ obligations under Article 310 of the North American Free Trade Agreement (NAFTA), which says that “all fees and charges shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.”

Bradley says he hopes the new Canadian government of Justin Trudeau will take up the issue and challenge the law as soon as it becomes effective.

Frequently asked questions about the fee increases can be found on the USDA website.

 


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